Unified approach utilizing entropy to measure operational complexity of supplier-customer system - case studies

Paper discusses unified approach based upon entropy for quantitative measurement of operational complexity of company supplier-customer relations. We assume a problem-oriented database exists, which contains detailed records of all product forecasts, orders and deliveries both in quantity and time, scheduled and realized, too. Basic DB pre-processing detects the most important flow variations, e.g. order - forecast, delivery - order, and actual production - scheduled one, provided set of states monitoring various flow variations having been defined. The variation states are classified considering their severity with respect to management control decisions. After consistency checks of collected data, histograms and empirical distribution functions are constructed. Finally, the entropy, information-theoretic measure of supplier-customer operational complexity, is calculated by Mathematica module developed. Results of supplier-customer system analysis from selected Czech SME are presented in detail.