A Simulator for Design and Analysis of Supply Chains

T.H. Truong and F. Azadivar (USA)

Keywords

Simulation, supply chain management, bullwhip effect, object oriented

Abstract

The complexity and dynamics of supply chains are not easily depicted by analytical models. Simulation is therefore suggested as a powerful tool that enables managers to truly analyze supply chains over time and understand the cause and effect relationships among their fundamental elements. In this paper, we describe a framework of a general-purpose supply chain simulator and its applications in analyzing performance of supply chains. A general structure for supply chains is developed in which the major processes and interrelationships are captured. We present various experiments of applying this simulator in measuring the performance of a supply chain under different policy making scenarios. These experiments involve strategies in production planning, inventory control and information sharing. We also describe the Bullwhip effect in supply chains where demand information is distorted in a conventional supply chain. The simulator confirms the damping effect of sharing information between partners on the Bullwhip effect.

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