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Entropy 2016, 18(4), 137; doi:10.3390/e18040137

Operational Complexity of Supplier-Customer Systems Measured by Entropy—Case Studies

Department of Economics and Quantitative Methods, Faculty of Economics, University of West Bohemia, Husova 11, Pilsen 30614, Czech Republic
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Academic Editors: J. A. Tenreiro Machado and António M. Lopes
Received: 3 December 2015 / Revised: 14 March 2016 / Accepted: 28 March 2016 / Published: 14 April 2016
(This article belongs to the Special Issue Computational Complexity)
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Abstract

This paper discusses a unified entropy-based approach for the quantitative measurement of operational complexity of company supplier-customer relations. Classical Shannon entropy is utilized. Beside this quantification tool, we also explore the relations between Shannon entropy and (c,d)-entropy in more details. An analytic description of so called iso-quant curves is given, too. We present five case studies, albeit in an anonymous setting, describing various details of general procedures for measuring the operational complexity of supplier-customer systems. In general, 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. Data processing detects important flow variations both in volumes and times, e.g., order—forecast, delivery—order, and actual production—scheduled one. The unifying quantity used for entropy computation is the time gap between actual delivery time and order issue time, which is nothing else but a lead time in inventory control models. After data consistency checks, histograms and empirical distribution functions are constructed. Finally, the entropy, information-theoretic measure of supplier-customer operational complexity, is calculated. Basic steps of the algorithm are mentioned briefly, too. Results of supplier-customer system analysis from selected Czech small and medium-sized enterprises (SMEs) are presented in various computational and managerial decision making details. An enterprise is ranked as SME one, if it has at most 250 employees and its turnover does not exceed 50 million USD per year, or its balance sheet total does not exceed 43 million USD per year, alternatively. View Full-Text
Keywords: entropy; generalized entropy; information measure; operational complexity; supplier-consumer system entropy; generalized entropy; information measure; operational complexity; supplier-consumer system
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Lukáš, L.; Hofman, J. Operational Complexity of Supplier-Customer Systems Measured by Entropy—Case Studies. Entropy 2016, 18, 137.

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