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Supplier Selection and Sales Forecasting in Supply Chain Collaboration

Author: ShuTong
Tutor: ChenShou
School: Hunan University
Course: Management Science and Engineering
Keywords: Supply Chain Collaboration CPFR Information Theory Supplier Selection Sales Forecasting Factor Analysis
CLC: F224
Type: PhD thesis
Year: 2008
Downloads: 1600
Quote: 6
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Abstract


Voluntary Interindustry Commerce Standards (VICS) in North America introduced Collaborative Planning, Forecasting and Replenishment (CPFR), drawing on the notion and the working flow of sales promotion plans, exception treatment, multi-level collaboration and synchronization. CPFR can be seen as a demand-oriented, expanded supply chain, providing a whole set of working flow. This working flow considers the improvement of consumers’value as shared objectives, by means of collaboration of supply-chain enterprises, the share of standardized information, establishment of objective plans, the practice of market forecasting, effective production and inventory management, as well as timely replenishment in terms of dynamic demands. As such, the performance and efficiency of the whole supply chain can be improved, demonstrating the thought of collaborative management of the supply chain.The notion and methods of CPFR have a number of advantages, which are being accepted by supply-chain enterprises. The leading enterprises are motivated to implement CPFR. However, the system of CPFR and its working flow are at the stage of being acceptable rather than being put into practice, and various devices and approaches, involved in the working flow, are to be delved into and solved.The research home and abroad indicates that the theory and methodology of supply-chain collaboration are mainly concerned with theory, thought, system and simulation at strategic and tactic levels, with quantitative analysis mainly involving supply-chain inventory collaboration. This includes empirical analyses and simulation experiments. In their findings, there are neither any practical analysis of the overall collaboration of leading enterprises with their forward and backward enterprises, nor multi-hierarchical analyses of supplier selection in the environment of collaboration, nor analyses of the role of factors in sales forecasting and demand information and their application in the supply-chain enterprises.The Information Theory has advanced, and it has been expanded and applied to a large number of natural and social disciplines. Nevertheless, its relationship with managerial discipline, as well as the possible representation in the economic information and managerial conduct, is to be investigated. Furthermore, there is little literature addressing the nature and basis of supply-chain collaboration, nor is there explication of what sort of driving role information plays in the process of collaboration of supply-chain enterprises. At the same time, the representation forms of information in supply-chain collaboration are not salient in the previous literature. The research on these gaps can generalize and summarize information and its representation forms in supply-chain collaboration, delineating a general outline and direction. Given that this is compared and analyzed in terms of the physical information and its features in reality, it is likely that the research on supply-chain collaboration can be raised to a philosophical level.Based on the points mentioned above, this study starts with the specific working flow of CPFR in the context of supply chain collaboration. At the same time, the Information Theory is introduced to investigate it systematically, which can provide new theoretical bedrocks and methods for supplier selection and supply chain collaborative forecasting. This can be considered as important supplementary content to CPFR and contribute to the initiation and development of theory and methods involved in supply chain management. This has significant bearing on theory and practices of extending the Information Theory to the discipline of management, thus obtaining the corresponding representations and sound interpretations.This dissertation is composed of six chapters from three perspectives. First, it presents the theory, concepts and content of the supply chain management and collaboration, expounds the system and working flow of the CPFR as well as its supportive role in supply chain collaboration. It raises questions on the basis of the working flow of CPFR; it explicates the fundamental theory and research scope of the Information Theory; it analyzes the sources and treatment of economic information in terms of the Information Theory; it discusses the research status and development of relevant theory and methods; based on the research background and objectives, it provides the research orientation and content, by which it proposes the theoretical frame of this study. Second, in the context of supply chain collaboration, and on the basis of the theory and methods of the supply chain collaborative agreements and their corresponding supplier selection, and in terms of the actual results of the multiple investigation and interviews of the management staff in different manufacturing enterprises, a new model of hierarchical economic information filter of supplier selection is established, corresponding to three stages of information collection, distribution, supplier selection and supplier dynamic assessment. The corresponding index system is established, and the weighting and importance ranking of the index system is obtained, and the process and results of supplier selection and its relationship with the Information Theory and the corresponding representations are discussed. Finally, on the basis of supply chain collaboration theory and forecasting methods, it analyses the relevant theory and methods of chorological forecasting, discusses the role of factors in chorological forecasting, puts forth supply chain hierarchical collaborative forecasting methods based on factors through empirical studies, and explicates the analytical processes and results of the supply chain collaborative forecasting and their factors as well as its relationship with the Information Theory and the corresponding representations.This study can be seen as consistent and interdisciplinary in its overall framework. The dissertation starts with the specific working flow of CPFR, concentrating on supplier selection and supply chain collaborative forecasting, displaying its supporting role in supply chain collaboration, with the Information Theory running through the whole project, and hence forms a relative complete mechanism as well as an empirical verification system.This study has the following findings. First, supply chain collaboration is one part of the economic activity, and supply chain collaborative information is one part of the economic information. The information Theory plays a supporting role in understanding and treating supply chain collaborative information. The fundamental structure of the supply chain collaborative information is based on categories and hierarchies of products and services. To search for supply chain collaborative information can be seen as the key to obtaining information resources and the basis of decision optimization information. It requires information search, categorization, filtering and convergence in terms of optimized index in relation to supply chain collaborative activities. Second, the model of hierarchical economic information filtering defines the information search standards of supplier selection. It contributes to shielding the information interference and noises at different stages in the process of supplier selection and assessment. Also, it contributes to filtering, selecting, treating and adapting in real time in relation to dynamic supplier information. The establishment and application of this model can be considered as an extension of the economic information filtering of different modules at different stages. The index system in this model is the collection of valid information in supplier selection. The dyadic comparison of the average value of indices at different hierarchies can be seen as the relative importance ranking of information in supplier selection. The results of the index ordering in different hierarchies can be seen as the importance ranking of information weight of valid information collection in supplier selection. Third, the essence of the supply chain collaborative forecasting methods based on factors is to classify the supply chain demands and sales forecasting in hierarchy, to further classify them in terms of different areas in the same hierarchy, and subsequently to make forecast upwards hierarchy-by-hierarchy. That is, in terms of objects from different sources and in different hierarchies, the directly relevant factors are extracted and employed in forecasting. The essence of this method is that the supply chain demands and sales data correspond to economic information flow and that factors correspond to relatively valid information. The relative valid information can be extracted from the economic information flow in different hierarchies and different areas and subsequently be quantified. Further, the effect can be reverted in the forecasting value and the prospective potential economic information flow can be obtained. The empirical studies indicate that factors play an important role in supply chain sales forecasting, and their application can increase the forecasting accuracy greatly and represent the idea of collaborative forecasting. The factors in economic and management domains can be considered as the noises in economic and management conducts, and they can be quantified and put into effective application in practice. The collaborative forecasting methods based on factors can contribute to searching and extracting supply chain valid information in different categories and different hierarchies. In addition, they can contribute to the implicit supply chain and the prominent information application; they contribute to positively exploiting the potential negative constraints in supply chain enterprises; they can contribute to management of the supply chain as an information whole; they can be seen as an extension of the economic information filter in different hierarchies and different modules.This study discusses the supporting role of the Information Theory in understanding and treating supply chain collaborative information; it points out that the fundamental structure of supply chain collaborative information is based on categories and hierarchies of products and services; it constructs a model of hierarchical economic information filtering of supplier selection; it defines the searching standards of information hierarchy in supplier selection; it obtains the index system, weighting and interpretation at three different stages: information collection and distribution, supplier selection and supplier dynamic selection; it puts forth the supply chain collaborative forecasting methods based on factors; it analyzes the important role of the factors in supply chain collaborative forecasting; it points out that the factors in economics and management domains can be seen as noises in economics and management conducts, which can be quantified and put into effective use in practice. Introducing the Information Theory into the research on supplier selection and supply chain collaborative forecasting can be considered as the extension of the Information Theory in management theory and conducts. All these can be seen as the contribution of this study in terms of theory and methods.

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CLC: > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods
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