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Efficient vs. Responsive supplier selection for functional and innovative products: A quantitative study

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  • Mahdavi, Mojtaba
  • Mahmoudzadeh, Mahdi
  • Olsen, Tava Lennon

Abstract

Fisher's (1997) conceptual framework of building efficient supply chains for functional products and responsive supply chains for innovative products is one of the earliest and most widely discussed guidelines in supply chain management. Previous research has largely focused on qualitative and conceptual studies. The emergence of supply chain analytics, and technical developments for that, has made the missing analytical guideline more apparent. In this paper, we develop a quantitative model to perform analytics on this decision making for managers. We formulate the problem as a supplier selection problem for the product type considered and develop a continuous review inventory model with EOQ ordering reflecting Fisher's (1997) qualitative discussion. Our model helps us present quantitative analytics of the above guideline. Our analysis shows that overoptimism about the forecast accuracy and overconfidence about the service level for an innovative product are the main reasons behind the common mismatch (i.e., using efficient supply chains for innovative products) in selecting the right supply chain.

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  • Mahdavi, Mojtaba & Mahmoudzadeh, Mahdi & Olsen, Tava Lennon, 2023. "Efficient vs. Responsive supplier selection for functional and innovative products: A quantitative study," International Journal of Production Economics, Elsevier, vol. 255(C).
    • Handle: RePEc:eee:proeco:v:255:y:2023:i:c:s0925527322002389
    DOI: 10.1016/j.ijpe.2022.108656
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    2. Deligiannis, Michalis & Liberopoulos, George & Pandelis, Dimitrios G., 2023. "Managing supply chain risks with dual sourcing: Bayesian learning of censored supply capacity," International Journal of Production Economics, Elsevier, vol. 265(C).
    3. Claudia Aparecida de Mattos & Fernanda Caveiro Correia & Kumiko Oshio Kissimoto, 2024. "Artificial Intelligence Capabilities for Demand Planning Process," Logistics, MDPI, vol. 8(2), pages 1-16, May.

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