1. ¹National University of Singapore
2. ²Indian Institute of Science, Banglore, India

Correspondence: Dr N R Srinivasa Raghavan, Management Studies, Indian Institute of Science, Banglore, India 560 012. E-mail: raghavan@mgmt.iis.ernet.in

Received February 1999; Accepted December 1999.

Abstract

In this paper, we investigated a dynamic modelling technique for analysing supply chain networks using generalised stochastic Petri nets (GSPNs). The customer order arrival process is assumed to be Poisson and the service processes at the various facilities of the supply chain are assumed to be exponential. Our model takes into account both the procurement process and delivery logistics that exist between any two members of the supply chain. We compare the performance of two production planning and control policies, the make-to-stock and the assemble-to-order systems in terms of total cost which is the sum of inventory carrying cost and cost incurred due to delayed deliveries. We formulate and solve the decoupling point location problem in supply chains as a total relevant cost (sum of inventory carrying cost and the delay costs) minimisation problem. We use the framework of integrated GSPN-queuing network modelling—with the GSPN at the higher level and a generalised queuing network at the lower level—to solve the decoupling point location problem.