Quantitative payoff evaluation for track and trace system in supply chains

Abstract

The track and trace information increases the supply chain visibility which leads to the improvement of the operation efficiency and effectiveness. A performance evaluation method for track and trace system can help a company to select the best system design and identify the degree of improvement for an implemented system. Existing research works on the performance evaluation of track and trace have limitations such as only supporting single product state and lack of consideration for missing and erroneous insertion of information. In this paper, we take payoff as performance criteria and model the input and output of the system as unequal lengths of product state sequences. A novel pad-and-transit technique is proposed to identify and generate intermediate information transformations with missing and erroneous inserted information. Based on the identified transformations, the expected payoff is then evaluated using a closed form formula. A numerical case study is provided to illustrate the application of the proposed method.