Abstract for: Exploring Duplicate Orders in a Single-Manufacturer Multi-Distributor Supply Chains
This paper seeks to better understand how duplicate orders may dynamically influence the general performance in a single-manufacturer multi-distributor supply chain. We analyze a system where manufacturer sells her products through two distributors and the distributors sell the products to final customers. If a distributor is not able to satisfy his final customer demand, the unsatisfied demand will be backlogged and the customer will also place the order to the other distributor with certain probability. When the customer demand is satisfied by any of the distributors, the customer will cancel the duplicated order to the other distributor. Finally, when final customer demand exceeds available distributors supply, distributors often hedge against shortages by inflating orders to the manufacturers. Our results allow us to characterize the supply chain performance according to different probabilities to duplicate orders, different times to build manufacturer’s capacity and the well-known anchoring and adjustment heuristic to model distributor orders and manufacturer capacity investment.