We consider a production stage that produces a single item in a make-to-stock manner. Demand for finished goods is stationary. In each time period, an updated vector of demand forecasts over the forecast horizon becomes available for use in production decisions. We model the sequence of forecast...

Two recent papers on managing new product diffusion decisions under production constraints reach somewhat contradictory conclusions. Ho et al. (Ho, T.-H., S. Savin, C. Terwiesch. 2002. Managing demand and sales dynamics in new product diffusion under supply constraint. <i>Management Sci.</i> <b>48</b>(2)...

This paper studies the potential benefits of collaborative forecasting (CF) partnerships in a supply chain that consists of a manufacturer and a retailer. To reflect the reality in production environments, we propose a scorecard that captures inventory considerations, production smoothing, and...

We propose a model in which subcontracting can be explicitly considered as a production planning strategy. Possible market and nonmarket subcontracting mechanisms and their costs are discussed. We show that a class of feasible subcontracting mechanisms in which firms coordinate their production...

We consider the problem of smoothing production in a job shop in which all production is to customer order and the demand process is a stationary stochastic process. We present an approach to production smoothing based on the concept of a planning window. A planning window is the difference...

This paper studies supply chain demand variability in a model with one supplier and Nretailers that face stochastic demand. Retailers implement scheduled ordering policies: Orders occur at fixed intervals and are equal to some multiple of a fixed batch size. A method is presented that exactly...

An important observation in supply chain management, known as the bullwhip effect, suggests that demand variability increases as one moves up a supply chain. In this paper we quantify this effect for simple, two-stage supply chains consisting of a single retailer and a single manufacturer. Our...

This paper presents a multistage supply chain model that is based on Autoregressive Integrated Moving Average (ARIMA) time-series models. Given an ARIMA model of consumer demand and the lead times at each stage, it is shown that the orders and inventories at each stage are also ARIMA, and...

Consider a supplier selling to multiple retailers. Demand varies across periods, but the supplier's capacity and wholesale price are fixed. If demand is high, the retailers' needs exceed capacity, and the supplier must implement an allocation mechanism to dole out production. We examine how the...

The tendency of orders to increase in variability as one moves up a supply chain is commonly known as the bullwhip effect. We study this phenomenon from a behavioral perspective in the context of a simple, serial, supply chain subject to information lags and stochastic demand. We conduct two...