• Information and material flow integration [34]: The extent to which all functions within the supply chain communicate information and transport materials.
• Effective risk management [35]: All of the relationships within the supply chain contain inherent risk. Effective risk management describes the degree to which the effects of these risks is minimized.
• Supplier performance: With what consistency suppliers deliver raw materials to production facilities on time and in good condition.
4.2. Quantitative performance measures
Quantitative performance measures are those measures that may be directly described numerically. Quantitative supply chain performance measures may be categorized by: (1) objectives that are based directly on cost or profit and (2) objectives that are based on some measure of customer responsiveness.
4.2.1. Measures based on cost
• Cost minimization: The most widely used objective. Cost is typically minimized for an entire supply chain (total cost), or is minimized for particular business units or stages.
• Sales maximization [36]: Maximize the amount of sales dollars or units sold.
• Profit maximization: Maximize revenues less costs.
• Inventory investment minimization [18]: Minimize the amount of inventory costs (including product costs and holding costs).
• Return on investment maximization [33]: Maximize the ratio of net profit to capital that was employed to produce that profit.
4.2.2. Measures based on customer responsiveness
• Fill rate maximization: Maximize the fraction of customer orders filled on time.
• Product lateness minimization: Minimize the amount of time between the promised product
delivery date and the actual product delivery date.
• Customer response time minimization: Minimize the amount of time required from the time an order is placed until the time the order is received by the customer. Usually refers to external customers only.
• Lead time minimization: Minimize the amount of time required from the time a product has begun its manufacture until the time it is completely processed.
• Function duplication minimization [34]: Minimize the number of business functions that are provided by more than one business entity.
4.3. Performance measures used in supply chain modeling
As mentioned above, an important element in supply chain modeling is the establishment of appropriate performance measures. Each of the models reviewed in Section 3 sought to optimize one or more measures of supply chain performance, given a set of physical or operational system constraints. Table 1 below summarizes the performance measures used in the reviewed research.
ร. Decision variables in supply chain modeling
In supply chain modeling, the performance measures (such as those described in Section 4) are expressed as functions of one or more decision variables. These decision variables are then chosen in such a way as to optimize one or more performance measures. The decision variables used in the reviewed models are described below.
• Production/distribution scheduling: Scheduling the manufacturing and/or distribution.
• Inventory levels: Determining the amount and location of every raw material, sub-assembly, and final assembly storage.
• Number of stages (echelons): Determining the number of stages (or echelons) that will comprise the supply chain. This involves either increasing or decreasing the chain’s level of vertical