Simulation based optimization decision support tool for production planning

Abstract

The planning of a supply chain network as an integrated system is a difficult task. The purpose of this article is to focus on developing a hybrid approach to address the supply chain planning problem. The proposed approach combines simulation and mixed integer linear programming. The supply chain system studied includes discrete and continuous processes. These two aspects should be always considered together in any modelling approach. This article, first, focuses on developing a discrete event simulation model of a hybrid supply chain, which is used to best describe the system and therefore to evaluate the system behavior over time. This simulation model permits to verify the feasibility of a given optimal planning proposed by a mixed integer programming model. The objective of this approach is to evaluate the solution of the optimization model by the simulation model. The efficacy and the usefulness of the approach are illustrated with a complex real industrial supply chain, consisting of several logistic activities in a chemical fertilizer plant.