SUPPLY CHAIN STRATEGY

R i g h t C h a i n ™

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In any decision making environment, without an objective function AND constraint(s), any answer is right and any answer is wrong. If that’s the case, and since most business and supply chain decisions are not framed this way, how are business or supply chain decisions made? Unfortunately, it often comes down to who can write the most caustic email, who has the boss’s ear, who has the most political clout, etc. That’s what we’re trying to avoid. Every optimization statement has two elements - an objective function and constraints. In supply chain logistics, the objective function is usually to minimize total logistics cost or to maximize some aspect of financial performance. The constraints should be the elements of `-the customer service policy including fill rate, response time, delivery frequency, and delivery quality requirements. In less formal