Simulation-Based Optimization on Control Strategies of Three-Echelon Inventory in Hybrid Supply Chain With Order Uncertainty

Abstract

Multi-echelon inventory control is the main form of the management of supply chain inventory, and it has been paid extensive attention by scholars because of its importance in supply chain management. Process industries, represented by metallurgy, petrochemical and pharmaceutical industry, have typical characteristics such as high investment, high costs, and high resource utilization, they play a key role in industrialization. In this paper, the simulation model of a multiproduct three-echelon inventory control system is established for the hybrid supply chain of the process industry. Based on the idea of control engineering, a feedback control law is designed for inventory control. Several mixed inventory control strategies were applied to the model. The proportional plus integral control algorithm is used to modify the inventory control strategies. Based on this simulation model, a simulation-based optimization method is applied to the three-echelon inventory control system. The results show that the reciprocal of total entropy ratio and customer satisfaction are optimized by the mixed inventory control strategies when the hybrid supply chain is affected by order uncertainty.