Enhancement the Performance of Multi-Level and Multi-Commodity in Supply Chain: A Simulation Approach

Abstract

In today's global economy, effective supply chain management plays a pivotal role in the success of a business. The repercussions of a business strategy on the entire supply chain remain uncertain until it is implemented. Utilizing simulations offers the opportunity to gauge performance before implementing the strategy. The primary aim of employing supply chain simulation is to analyze the effects of different strategies on profit enhancement and cost reduction across all supply chain tiers. This research paper has formulated a discrete event simulation model using Arena software to evaluate and enhance the operational efficiency of the detergent supply chain. The problem involves multiple levels and commodities, encompassing four manufacturers, two intermediate storage warehouses, and four main distributors following an (s, S) inventory control approach. Shortages are permitted, leading to a partial loss or back-ordering of products. The overarching objective is to minimize the overall inventory costs within the system, accounting for holding costs at each tier, managing shortages, and the expense incurred due to lost sales. A range of scenarios are developed to set control parameters, with the evaluation of supply chain performance falling into two main categories: financial and operational considerations.