A System Dynamics Model for Sales and Operations Planning

Abstract

The use of system dynamics techniques to model the sales and operations planning (S&OP), associated with the economic and financial processes, is an innovative proposal. The objectives of this article are to model and simulate the S&OP process integrated with the financial management in a Brazilian lime processing industry, based on the system dynamics approach. Initially, the model was validated. Then, over twenty scenarios were simulated to assess the behavior of the system with its key factors variation. In the microenvironment scenarios, the company's internal perspective was the only element taken into account. In turn, regarding the macro environment scenarios, the basis was the projection of lime consumption related to the country's GDP. The results have genuinely contributed to the industry researched, since the lime processing industry is struggling with obtaining enough supply due to lime acquisition price fluctuations and, consequently, the oscillation of its production costs.

A Multimethodology for Supporting the Boundary Selection of System Dynamics Models

“…However, the simulation of the dynamics of a problem situation, from mathematical models based on the System Dynamics approach, can generate knowledge about this situation, and consequently guide decisions with a systemic and dynamics feature, thus providing a greater probability of "correct" actions. (Vennix, 1996;Sterman, 2000;Meadows, 2008;Aslani et al, 2018;Omamo et al, 2018;Abdollahi & Ebrahimi, 2019;Haddad & Otayek, 2019;Zelinka & Amadei, 2019;Kizito & Semwanga, 2020;Santos et al, 2020).…”