A probabilistic approach to information management of order fulfilment reliability with the help of perfect-order analytics

International Journal of Information Management. 2023. No. 68. Article 102567.

Lukinskiy V., Vladislav Lukinskiy, Ivanov D., Sokolov B., Bazhina D.

Supplier reliability and order fulfilment performance are usually assessed using a perfect-order calculation. Information
management of perfect-order estimation is frequently reduced to expert estimates and to the multiplication
of probabilities of failure-free performance of some logistics operations. Moreover, perfect-order
estimation is calculated without consideration of supply chain structure, possible combinations of failures, and
operational policies (e.g., safety stock levels and alternative transportation routes). As a result, the existing
methods frequently provide different estimates for the same statistics and cannot be consistently used in the
allocation of companies’ resources to improve the order fulfilment process. This paper considers different variants
of probabilistic assessment of a perfect order and proposes an approach to assess the impact of changes in
parameter probabilities and number of parameters on the value of a perfect order. The proposed models are
based on an analytical approach using discrete distributions of random variables. We illustrate the applicability
of our approach to several numerical examples to confirm the adequacy of the proposed method. Our approach
can be immediately applied in practice to assess supply and order fulfilment process reliability and to evaluate
the effectiveness of various operational policies (safety stock levels or modes of transportation) to achieve some
planned values of a perfect order in the supply chain.

Keywords: supply chain, information management, Supply reliability, Perfect-order analytics