ABSTRACT
In this chapter 5, we explain how variation management approaches and models for pre- and after-sales supply chains can be extended and used for complicated supply networks with more than one facility in each echelon. In this chapter, we consider a company including both a pre-sales supply network producing and supplying products to markets and an after-sales supply network providing spare parts to fulfill the after-sales commitments. Variations in estimating product demands in the pre-sales markets and spare parts demands in the after-sales markets and qualified output of production facilities throughout these two networks are considered in this problem. We propose a mathematical model for determining the best marketing strategies for this company (price, warranty length and service levels) in the markets and preserving reliable flow dynamics throughout the networks. Finally, the model is tested on example from the engine industry. Some managerial insights are provided by analyzing the results.
