Journal
OMEGA-INTERNATIONAL JOURNAL OF MANAGEMENT SCIENCE
Volume 35, Issue 3, Pages 258-273Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.omega.2005.06.003
Keywords
supply chain coordination; transfer prices; targets; centralization; decentralization; simulation experiment
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In this paper, we look at the internal supply chain of an internationally operating firm characterized by a multi-location and multi-stage operations structure. We address problems at three levels, namely the strategic, tactical, and operational levels. Our approach goes beyond the operational literature, and focuses primarily on the tactical level. We specify a model and a case that capture strategic and tactical issues and relate the tactical issues to organizational issues. We simulate coordination in different organizational forms pertaining to the 'tactical control' of the firm. Our analysis suggests that a functionally organized multi-location and multi-stage operations structure using traditional planning will not work. The choice is between a strongly IT-based, centralized organization or a more decentralized organization using transfer prices as the coordination device. (c) 2005 Elsevier Ltd. All rights reserved.
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