A simulation model for dual-pipeline replenishment in cluster supply chain network

Abstract

Cluster supply chain is the network of supply chains based on localization and integration in industrial cluster. It is often that multiple supply chains in the same cluster are interactive and collaborate with each other. This paper considers the dual-pipeline replenishment across two supply chains including two echelons (supplier-retailer). The third party logistics provider (TPL) is introduced into the cluster supply chain network to coordinate the replenishment. Adopting the theory of Automatic Pipeline, Inventory and Order Based Production Control System (APIOBPCS) and system dynamics, this paper proposes a VMI&TPL-APIOBPCS model to simulate the process of dualpipeline replenishment and dispatching when the TPL implements Vendor Managed Inventory (VMI) to coordinate the two supply chains. The simulation results show that the model can effectively decrease the total inventory of two supply chains, make the production rate smoother and reduce the Bullwhip effect.