EVALUATING THE ECONOMIC IMPACT OF DEMAND, SUPPLY AND PROCESS UNCERTAINTY IN A RETAIL SUPPLY CHAIN
Keywords:
Uncertainty, economic impact, retail supply chain, information inaccuracyAbstract
The aim of this paper is to examine the relationship between the uncertainty in both demand and supply sides, and economic impact, in a retail supply chain. These uncertainties increase the risk within the chains, and risk is a consequence of the external and internal uncertainties that affect a supply chain. A case of a retailer that is not aware of information inaccuracy as well as inventory error, or chooses to ignore them in order to evaluate the efficiency loss due to errors compared with an error free situation was analyzed. This inaccuracy is caused by the uncertainty of customer demand, supplier delivery lead time and shipment quantity. The results indicate that the elimination of uncertainty can reduce supply chain costs and hence, increase profit.
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