Abstract
This article describes the use of simulation to de sign a multilevel distribution system which is supplied by one manufacturing plant and several local suppliers. The program is written in SIMSCRIPT. Each regional warehouse is assumed to obtain most of its product from one distribution center, which is in turn supplied by the manufacturer. The model generates forecasts at each level based on demand data which is randomized in accordance with empirical distributions. If the manufacturing capacities, which in the simula tion are user-specified, are too small to meet the demand, the model adjusts the distribution schedule. Each warehouse is provided the opportunity to pur chase some fraction of its demand for any item from a local independent supplier on a routine basis and on an extra-purchase basis when the manufacturer can not supply the item through his distribution centers. The article discusses model validation and an appli cation of the simulator to determine the optimum number and the locations of storage facilities and to improve inventory control.
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