The Outcome of Flexible Lead Times on the Distributors

Finding ways to reduce overall inventory through smart supply chain structures can be the difference between success and failure. Therefore, the performance of supply chains has been under thorough examination during the last decades. The Bullwhip effect is an important indicator and measure of the performance of the supply chain, which in recent years has motivated an increasing number of studies and attempts at coming to terms with the phenomena that drive the Bullwhip effect. In this paper we will focus on the effect of flexibility in lead times on the distributors, which are "in the middle" of the supply chain. Flexibility can be gained through either joint agreements of the actors in the supply chain or through imprecision in either decisions or actions (or both). We will handle imprecision with fuzzy sets and we will argue that the supply chain will run more smoothly with flexibility. We will show that flexibility in the lead times will result in increased order quantities, as well as quantify the increase with a fuzzy EOQ model. This model is useful in a quest to solve three specific Bullwhip problems.