A supply chain is the set of activities required to provide products and services to customers, starting at the point of product design and ending with the delivery and installation of the product or provision of a service for customers. And the supply chain is described from many different perspectives, ranging from information flow, to physical distribution flow, to the process to satisfy a customer's order perfectly 100% of the time. For these reason, supply chain management is very difficult. Such as, complexity of system described the set of various functions and activities.
Therefore, supply chain measurement is important for management efficiently, as it affects behavior that impacts supply chain performance. As such, performance measurement provides the means by which a company can assess whether its supply chain has improved or degraded. In the matter of these problem, It has been proposed that performance measurement method is applied to various theory.
Traditionally, companies have tracked performance based largely on financial accounting principles. Financial accounting measures are certainly important in assessing whether or not operational changes are improving the financial health of an enterprise, but insufficient to measure supply chain performance for the following reasons.
First, The measures do not directly tie to operational effectiveness and efficiency.
Second, The measures do not relate to important strategic, non-financial performance, like customer service, loyalty and product quality.
In response to some of these deficiencies in traditional accounting methods for measuring supply chain performance, a variety of measurement approaches have been developed. Like the Supply Chain Council's SCOR Model, Balanced Scorecard(BSC), SCM scorecard and the others that there are based on the function and strategy for supply chain operation. but, this approaches as well as financial accounting measures are does not reflect market shifts.
In adapting a supply chain to the market characteristics of its performance, a supply chain must accommodate customer demand within the bounds of its physical capabilities. These supply and demand considerations create a direct link to economics, and particularly to the concept of elasticity.
The purpose of this study is to propose that a dynamic model for supply chain measurement and monitoring. And I describes the quantitative model, which is developed based on the AHP with 11 key performance indicators and their entropy-elasticities which reacts to the market shifts.