Bull whip effect 3

Once the credit card is approved an order number is

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Unformatted text preview: he site processes the information with respective banks for authorization and payment. Once the credit card is approved, an order number is issued to the customer. Almost instantaneously, the order is forwarded to the distributor who will drop-ship the item to the customer. At the distributor’ warehouse a pick list (along with s 12 a bar coded returns label) is printed, and the item is picked and packed. The inventory database is updated and runs a check whether a reorder point has been reached. If so, it will trigger a replenishment order to the manufacturer, and ultimately (after an MRP run) to his suppliers. The carrier is notified of the delivery requirement. As the package is picked up and moved by the carrier, the customer can visit the Web site at any time to track the shipment using the order number. In the mean time, the banks clear the accounts with the retailer, the warehouse, and the carrier. The general ledger, accounting payable, and accounts receivable are also updated. Note that a retail sale is processed simultaneously by multiple parties in a mixed format of transactions processing and information sharing - inventory data at the warehouse is shared between the distributor and the retailer, and delivery requirements and shipping status information are shared between the carrier and the retailer. The information hub does not have to exist physically. As distributed objectoriented computing environments like Common Object Request Broker Architecture or Distributed Component Object Model [26] are developed, individual functional modules may reside at scattered locations and be called and invoked only as needs arise. Thus, the information hub could exist only as a logical entity. 4. Challenges Information sharing in a supply chain faces several hurdles. The first and foremost challenge is that of aligning incentives of different partners. It would be naive of a partner to think that information sharing and cooperation will automatically increase his or her profit. In fact, each partner is wary of the possibility of ot...
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This note was uploaded on 11/06/2013 for the course ISYE 6202 taught by Professor Staff during the Fall '08 term at Georgia Tech.

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