Student name: Verónica González

RUN-EU institution: University of Burgos, Spain

Abstract

In the context of rapid economic, political, and social transformations, the uncertainty of demand poses significant challenges for effective supply chain management. This study underscores the imperative to enhance demand planning as a strategic approach to fortify supply chain governance and create substantial value for organisations. Inaccurate demand forecasting can lead to material planning inconsistencies, jeopardising competitive delivery timelines and resulting in customer dissatisfaction and lost revenue opportunities.

This research examines the governance processes related to inventory management that enable competitive delivery performance under conditions of heightened demand uncertainty. The portfolio comprised of seven distinct final products, each assigned specific deadlines contingent upon the availability of components in stock. Maintaining positive inventory costs is essential; thus, optimal component levels must be strategically managed to minimise delivery lead times and bolster competitive advantage.

The primary objective of this study is to develop a lead time optimisation model utilising CPLEX, aimed at minimising inventory costs while simultaneously addressing potential sales losses due to stockouts. This model integrates cost reduction strategies with enhancements in service levels by ensuring the timely availability of requisite components. Through comprehensive simulations and scenario analyses, we investigate various dimensions of demand uncertainty and component lead times, elucidating how effective inventory governance can mitigate risks associated with stock unavailability.

Our findings contribute critical insights into supply chain management practices by highlighting strategies that harmonise cost efficiency with service excellence. This research emphasises the necessity of integrating robust inventory management frameworks with demand planning initiatives to achieve sustainable operational success in an increasingly volatile market landscape.