A method to determine customer-specific volume flexibility in a supply network

Volume flexibility is a crucial factor to keep up performance in supply networks. In order to align volume flexibility requirements along the various supply chains within the networks, contracts defining flexibility ranges are set up increasingly in customer-supplier relationships. However, suppliers lack suitable methods to evaluate the limits of volume flexibility that they can guarantee in terms of a contract, especially if they are members of several cross-linked supply chains. Hence, this article presents an approach to evaluate customer-specific volume flexibility. Therefore, factors influencing volume flexibility are modelled mathematically. Subsequently, a dedicated simulation system is introduced to evaluate volume flexibility of different demand scenarios in terms of flexibility range as well as adjustment time and costs. Finally, the interpretation of the simulation results is demonstrated.