Simulation of a stochastic multi-echelon distribution supply chain under a continuous inventory control policy

Hamid Ech-Cheikh,Khalid El Had,Abdessamad Douraid

doi:10.14419/ijet.v9i2.29963

Abstract

Multi Echelon Distribution System (MEDS) is a multifaceted system focusing on integration of all factors involved in the entire distribution process of finished goods to customers. This paper proposes a simulation framework at the operational level of MEDS. The proposed model includes three echelons, based on discrete-event simulation approach, where the performed operations within our system are depending on several key variables that often seem to have strong interrelationships. It is necessary to simulate such complicated system, in order to understand the whole mechanism, to analyze the interactions between various components and eventually to provide information without decomposing the system. The simulation framework is used to evaluate the performance of the considered system at initial conditions and to compare it with different scenarios generated by simulation running. The study concludes with an analysis of system performance and the finding results according to each scenario.Â Â Â

Highlights

Multi-echelon inventory models are widely studied in the literature, there are different types of networks and inventory control methods investigated in this area
In multi-echelon distribution system, several configurations are possible, from the simplest network where a single node provides the distribution of goods to the end customers; to the complicated network where products pass across multiple nodes and transportation ways, before reaching their final destination
In case of high demand frequency, the stock levels would have to be increased by 40 % comparing to the initial condition in order to bring customer satisfaction level to 100%

Summary

Introduction

Multi-echelon inventory models are widely studied in the literature, there are different types of networks and inventory control methods investigated in this area. We talk about a multi-echelon inventory system, when a product passes through more than one node before reaching the end customer. In multi-echelon distribution system, several configurations are possible, from the simplest network where a single node provides the distribution of goods to the end customers (without including any intermediary); to the complicated network where products pass across multiple nodes and transportation ways, before reaching their final destination. The growing interest in multiechelon distribution networks has in turn pointed out the importance of relying on efficient practices to manage his complexity and enormity. Researchers have studied a variety of problems in multi-echelon distribution systems. The current research is distinct from previous research because it combines all of the following features:

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Conclusion