- Book Chapter
1
- 10.1007/978-981-13-2396-6_10
Simulating the Impact of Fuel Prices on Transportation Performance in Aerospace Supply Chains
- Jan 01, 2018
- David Allen + 6 more +6
Due to the vast distances between aerospace supply chain (SC) members, the logistical implications of outsourcing decisions must be considered, including the uncertainty in transportation costs (TC) caused by fluctuating fuel prices. Analytical models often model the impact of fuel prices without capturing the dynamic behavior of SC networks. Discrete event simulation (DES) can capture such behavior and correlate it with financial performance to support decision making. This paper uses DES to model the impact of fuel prices on TC and inventory holding costs (IHC) in a three-tier SC scenario where suppliers deliver products via land/sea- or air freight. The results show the transportation decisions can be used to mitigate the influence of fuel prices on the TC. The value, weight and size of products transported throughout the SC also influence in whether TCs or IHCs drive total SC costs. Future work could apply the methodology to larger and more complex SCs.
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