A Simulation Based Inventory Optimization Heuristic for a Retail Supply Chain

A Simulation Based Inventory Optimization Heuristic for a Retail Supply Chain

Bibliographic Details
Main Author: Chandrika, Vedurmudi Shruti
Language:English
Published: University of Cincinnati / OhioLINK 2015
Subjects:
Mechanics
Inventory
Optimization
Retail Supply Chain
ARENA simulation
OptQuest
Online Access:http://rave.ohiolink.edu/etdc/view?acc_num=ucin1439309194
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spelling ndltd-OhioLink-oai-etd.ohiolink.edu-ucin14393091942021-08-03T06:33:01Z A Simulation Based Inventory Optimization Heuristic for a Retail Supply Chain Chandrika, Vedurmudi Shruti Mechanics Inventory Optimization Retail Supply Chain ARENA simulation OptQuest Retail Suppliers constantly face the issue of high inventory costs or high backlog costs.Thisstudy deals with a Retail Supplier who mainly supplies protective gear which are manufactured overseas (mainly Asia). This increases the complexity of the whole order-supply procedure. The products analyzed in this study are all products with high demand variability and volatility. The delivery lead times of the product are also unpredictable. The forecasting technique used by the Supplier does not take into account the demand variability. The Supplier also targets an average inventory turnover of 4 or higher for theseproducts. A simulation model is built in ARENA based on the Suppliers data for three main purposes a) To evaluate output performance characteristics of the current system. b) To assess if the Retail Supplier's target inventory turnover for the product under evaluation is an achievable target and a correct choice. c) To optimize the model to get the optimal order up to inventory quantities in order to minimize the total costs. The costs considered take into account holding costs, shortage costs and ordering costs. The three tests are conducted on the current system as well as the system introduced with the lead time variabilitybased on new data that was retrieved.The Newsvendor model is used to take into account the demand variability and serves as the basis for the demand module in the model[6]. The inventory policy used for the order-supply module is an order up to inventory system.The simulation model seeks to give optimized order up to inventory levels with minimum costs taking into account the lead time variability and target inventory turnovers using a heuristic optimization tool -OptQuest. The study provides an evaluation of the current system and an optimized solution for the values of the order up to levels. The simulation model also helps in concluding that a target inventory turnover of 4 or greater may not be the best for a D,E inventory categorized product. 2015-09-08 English text University of Cincinnati / OhioLINK http://rave.ohiolink.edu/etdc/view?acc_num=ucin1439309194 http://rave.ohiolink.edu/etdc/view?acc_num=ucin1439309194 unrestricted This thesis or dissertation is protected by copyright: all rights reserved. It may not be copied or redistributed beyond the terms of applicable copyright laws.
collection NDLTD
language English
sources NDLTD
topic Mechanics
Inventory
Optimization
Retail Supply Chain
ARENA simulation
OptQuest
spellingShingle Mechanics
Inventory
Optimization
Retail Supply Chain
ARENA simulation
OptQuest
Chandrika, Vedurmudi Shruti
A Simulation Based Inventory Optimization Heuristic for a Retail Supply Chain
author Chandrika, Vedurmudi Shruti
author_facet Chandrika, Vedurmudi Shruti
author_sort Chandrika, Vedurmudi Shruti
title A Simulation Based Inventory Optimization Heuristic for a Retail Supply Chain
title_short A Simulation Based Inventory Optimization Heuristic for a Retail Supply Chain
title_full A Simulation Based Inventory Optimization Heuristic for a Retail Supply Chain
title_fullStr A Simulation Based Inventory Optimization Heuristic for a Retail Supply Chain
title_full_unstemmed A Simulation Based Inventory Optimization Heuristic for a Retail Supply Chain
title_sort simulation based inventory optimization heuristic for a retail supply chain
publisher University of Cincinnati / OhioLINK
publishDate 2015
url http://rave.ohiolink.edu/etdc/view?acc_num=ucin1439309194
work_keys_str_mv AT chandrikavedurmudishruti asimulationbasedinventoryoptimizationheuristicforaretailsupplychain
AT chandrikavedurmudishruti simulationbasedinventoryoptimizationheuristicforaretailsupplychain
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