Simulation-based Optimization of Supply Chain Inventory and Forecast Policy

J. Beyer (Germany)


supply chain, simulation, optimization, inventory policy, demand forecast


Supply chain management is a process of integrating suppliers, manufacturers, warehouses, and retailers, so that goods are produced and delivered at the right quantities, and at the right time, while minimizing costs as well as satisfying customer requirements. Because of the inherent complexity of decision making in supply chains, there is a need for modelling and optimizing. When a supply chain has established the management needs manufacturing and distribution policies. In the supply chain context, both deterministic and stochastic models are relevant. Because of their large scale they are often difficult to solve analytically to optimality. Simulation permits the evaluation of operating performance prior to the execution of a plan. This paper discusses the inte gration of simulation and parameter optimization based on single and coordinated forecasting and inventory policies.

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