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Deciding on inventory allocation policies in the auto parts Brazilian distribution chain

Author

Listed:
  • Fabio Cardoso
  • Maria Lucia Galves
  • Jose Vieira

Abstract

The purpose of this paper is to evaluate the decision regarding whether to centralise or decentralise the stock of auto parts in Brazilian context. Extensive research was conducted regarding stock allocation policies, with a focus on centralisation and decentralisation, whereas the criteria for this decision were actually validated according to the opinion of Brazilian dealerships. A survey of 119 dealers revealed the important criteria for decision making using the analytic hierarchy process (AHP) approach. Our results demonstrate that dealerships assign high importance to delivery lead time, quality and flexibility in the delivery process from automakers. The results reveal that the simple trade-off between service level and inventory cost does not offer a definite distribution net design regarding stock allocation policies. This paper contributes by showing the criteria related to different types of stock allocations influence the decision regarding whether to centralise an auto parts' distribution chain in Brazil.

Suggested Citation

  • Fabio Cardoso & Maria Lucia Galves & Jose Vieira, 2022. "Deciding on inventory allocation policies in the auto parts Brazilian distribution chain," International Journal of Services and Operations Management, Inderscience Enterprises Ltd, vol. 42(2), pages 246-266.
    • Handle: RePEc:ids:ijsoma:v:42:y:2022:i:2:p:246-266
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