Concurrent Optimization of Physical and Information Flows in Supply Chains

Supply chain units are connected by both physical and information flows. Electronic services are used to perform a large part of activities in modern supply chains. The traditional supply chain configuration models pay the main attention to optimization of the physical flows. However, it is equally important to ensure that the physical units have appropriate information processing and logistics capabilities. Therefore, a model for joint configuration of the physical and information flows in e-retailing supply chains is elaborated in this paper. The model simultaneously identifies appropriate suppliers, selects the third party logistics service provider and selects appropriate electronic information processing services. The typical services used in global e-retailing are identified. The services are characterized by their functionality and quality of service measurements. The preliminary experimental studies demonstrate interdependencies between the physical and information flows.