Abstract
The problem is concerned with a single manufacturing enterprise producing varieties of products which are being distributed through a set of regional warehouses. The operations of each regional warehouse in the distribution subsystem is considered to be quasi‐autonomous in the sense that the decentralisation is granted to the extent of formulating and operating their own cost structure and transportation modes. For the production subsystem there is a need for aggregation of regional ordering policies to take advantage of the single manufacturing facilities. The boundaries of both subsystems are highly interactive. The simulation approach suggested in this study highlights the causal behaviour of the interacting boundaries and formulates a feedback control model in order to derive the various operational parameters of the total system. The effect of disturbance of the operational parameters on the total system behaviour has been studied through experimental design and analysis of variance.
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