Modelling Wholesale Company’s Supply Chain Using System Dynamics

Abstract

Research is based on wholesale and distribution operations of real-life case company, and in this setting, the most critical part of company’s supply chain is the inventory replenishment to warehouse (Distribution Center) as well as fulfilling and delivering customers’ orders. Different Economic Order Quantity (EOQ)-based models have been considered (Reorder Point, Reorder Point with pipeline on order inventory, and “pulse train”). Simulation system evaluates annual total logistics costs. Results show that in an environment, where local warehouse inventory levels are rather high and replenishment order quantity is rather small, it is important have frequent shipments divided in suitable intervals. In simulation model, this could be done e.g. with the use of “pulse train” function or incorporating pipeline on order inventory in order decision. The research findings are valid for a small-scale supply chain servicing small and geographically limited markets with clients assuming high customer service levels (e.g. 24-hours lead time). For bigger markets, the cross-docking based supply chain models are worth considering in simulations.

Advancements in Sustainable Manufacturing Supply Chain Modelling: a Review

“…Some researchers have applied SDS models to optimise inventory replenishment in manufacturing supply chains experiencing disruptions, in order to reduce annual total logistics costs (Kiisler and Hilmola 2020 ; Abdullah et al 2019 ; Botha et al 2017 ; Georgiadis 2013 ; Patel et al 2010 ). Sayyadi and Awasthi ( 2018 ) utilised SDS for evaluating various sustainable transport policies against criteria such as congestion level, fuel consumption, and emission in the transportation system of manufacturing supply chains.…”

Big data optimisation and management in supply chain management: a systematic literature review

“…While the application of systems dynamic approach has declined in favour of machine learning and agent-based modelling in the recent years, Chen et al (2013) employed this approach to study the total logistic costs, Torkul et al (2016) applied SD to ordering policy comparison, Sánchez-Ramírez et al ( 2019) employed SD to model delivery capabilities. Kiisler and Hilmola (2020) employed SD to study wholesale company supply chain. For example, Chen et al (2013) reviewed the state of the art of the application of agent based modelling in supply chain risk management.…”