Name
Title | ||
|---|---|---|
Service level agreements: ready-rate analysis with lump-sum and linear penalty structures. |
Abstract | ||
|---|---|---|
In operations management, service level agreements (SLAs) are widely used to evaluate and manage supplier performance. In a typical SLA, a target ready rate is periodically measured and a financial penalty is incurred if this target is not met. The ready rate considered in this study is defined as the long-run fraction of periods in which all customer demand is filled immediately from on-hand stock. Previous studies of SLAs have been solely concerned with one supplier serving one-customer, whereas in practice a supplier usually deals with more than one-customer. In multiple-customer cases, the supplier has an SLA with each customer and a penalty is incurred whenever the agreement is violated. In this work, we examine the impacts of various factors such as the base-stock level, the type of penalty and the review period duration on the supplier’s cost function when the supplier deals with multiple-customers. The results show that dealing with more customers is preferable for a supplier (assuming the overall demand is the same) and that a longer performance review phase is beneficial under a lump-sum penalty contract. |
Year | DOI | Venue |
|---|---|---|
2018 | 10.1057/s41274-017-0194-7 | JORS |
Keywords | Field | DocType |
service level agreements, ready rate, performance-based contracts, penalty clauses | Lump sum,Service level,Period duration,Computer science,Supply chain management,Operations management | Journal |
Volume | Issue | ISSN |
69 | 1 | 0160-5682 |
Citations | PageRank | References |
0 | 0.34 | 8 |
Authors | ||
4 | ||
Name | Order | Citations | PageRank |
|---|---|---|---|
| Osama Alamri | 1 | 0 | 0.34 |
| B. Abbasi | 2 | 145 | 19.89 |
| James P. Minas | 3 | 15 | 2.81 |
| Panlop Zeephongsekul | 4 | 144 | 19.11 |