The Effect of Demand Variability on Supply Chain Performance

This paper studies the impact of demand variability on supply chain performance which is measured in terms of operational costs, customer satisfaction, and environmental footprint. The operations within the supply chain have been simulated using a supply chain game simulator. The simulation results show that demand variability has a negative impact on all three supply chain performance metrics but mostly on the operational cost. The results also show that there is a significant increase in performance measurements variability with the increase of demand variability. The results provide managers with insights for planning and improving supply chain performance.