Simulation of Stock Strategies in Dynamic Supply Chains

Abstract

This paper is focused on the study of (T, S) stock strategies in dynamic supply chains. The dynamic supply chain means the retailer can change his suppliers in every purchase period for more profits. Four categories of two-stage supply chain structures consisting of multiple suppliers and a single retailer are considered. Two categories of auction mechanisms, single-winner or multi-winner auction, are used in this paper. A multi-agent model is developed to study these four categories of supply chains. The results of experiments show that, with the decrease of safety stock, the tendencies of the retailer’s profit are changed under different structures. Also, the optimal (near-optimal) safety stock, corresponding to the maximum profit, shows significant difference under different structures. The results of this paper demonstrate that the safety stock can be significantly changed and financial benefits can be achieved while working under different supply chain structures with (T, S) strategy.