Cloud computing and its impact on service level: a multi-agent simulation model

Supply chains are increasingly becoming more complex, making collaboration progressively difficult to establish and maintain. It is imperative to understand not only the consequences, but also the drivers of effective and efficient collaboration. In this study, we attempt to show how varying levels of collaboration impact service level and how cloud computing fosters these levels of collaboration. We introduce a framework detailing how cloud computing impacts three levels of collaboration: (1) information centralisation, (2) vendor managed inventory and continuous replenishment programmes and (3) business intelligence (BI) collaborative planning, forecasting and replenishment. In addition, we use multi-agent-based simulation to analyse how each level of collaboration (enhanced through cloud computing) impacts service level as measured by fill rate. Obtained results show that cloud computing can enhance all three levels of collaboration. Further, our results demonstrate that BI collaborative planning, forecasting and replenishment have significantly greater service level benefits in comparison to other collaboration levels.