Value Creation: Assessing the Cost Service Trade-off

Enver Yücesan
Additional contact information
Enver Yücesan: INSEAD

Chapter 5 in Competitive Supply Chains, 2023, pp 87-115 from Springer

Abstract: Abstract To ensure value creation, we must assess whether investing in a product, process, or supply chain redesign initiative is a value-creating or value-destroying proposition. For instance, if the additional cash flow generated by an increase in the customer’s willingness to pay (WTP) due to a new product design does not lead to a positive net present value to justify the investment of additional R&D resources, this is a value-destroying proposal. To assess these trade-offs in an objective fashion, supply chain professionals need a simple, but flexible, modeling framework. This chapter quantifies the cost-service trade-off through a materials management model. Such a model will also allow us to identify (and cost out) principal levers one can deploy for mitigating such a trade-off.

Keywords: Base stock policies; Loss function; Inventory drivers; Little’s Law (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-19975-2_5

Ordering information: This item can be ordered from
http://www.springer.com/9783031199752

DOI: 10.1007/978-3-031-19975-2_5

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().