Valuing lead time

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Etat: Supprimée
Version: Final published version
ID Serval
serval:BIB_2DEAC2ED99FE
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Institution
Titre
Valuing lead time
Périodique
Journal of Operations Management
Auteur⸱e⸱s
de Treville S., Bicer I., Chavez-Demoulin V., Hagspiel V., Schuerhoff N., Tasserit C., Wager S.
ISSN
0272-6963 (Print)
1873-1317 (Online)
Statut éditorial
Publié
Date de publication
09/2014
Peer-reviewed
Oui
Volume
32
Numéro
6
Pages
337-346
Langue
anglais
Résumé
When do short lead times warrant a cost premium? Decision makers generally agree that short lead times enhance competitiveness, but have struggled to quantify their benefits. Blackburn (2012) argued that the marginal value of time is low when demand is predictable and salvage values are high. de Treville et al. (2014) used real-options theory to quantify the relationship between mismatch cost and demand volatility, demonstrating that the marginal value of time increases with demand volatility, and with the volatility of demand volatility. We use the de Treville et al. model to explore the marginal value of time in three industrial supply chains facing relatively low demand volatility, extending the model to incorporate factors such as tender-loss risk, demand clustering in an order-up-to model, and use of a target fill rate that exceeded the newsvendor profit-maximizing order quantity. Each of these factors substantially increases the marginal value of time. In all of the companies under study, managers had underestimated the mismatch costs arising from lead time, so had underinvested in cutting lead times.
Mots-clé
Option theory, Manufacturing lead time, Supply-chain mismatch cost, Functional products
Web of science
Création de la notice
12/08/2014 12:44
Dernière modification de la notice
20/08/2019 13:12
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