Building a Framework for Determining the Optimal Supplier Shipping Performance

Most companies aim for perfect on-time delivery from suppliers, since late deliveries cause supply
disruptions. But some companies incur direct costs in maintaining supplier delivery performance. Our empirical research looked at a company that invests in suppliers to help them achieve a desired performance level. We developed a framework that captured the costs of late deliveries and target attainment. Using regression analysis, we modeled cost behavior in order to determine a delivery target that minimizes total cost.

Authors: Max Hurd and Izak van Rensburg
Advisor: Dr. Bruce Arntzen