<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Research is based on wholesale and distribution operations of real-life case company, and in this setting, the most critical part of company’s supply chain is the inventory replenishment to warehouse (Distribution Center) as well as fulfilling and delivering customers’ orders. Different Economic Order Quantity (EOQ)-based models have been considered (Reorder Point, Reorder Point with pipeline on order inventory, and “pulse train”). Simulation system evaluates annual total logistics costs. Results show that in an environment, where local warehouse inventory levels are rather high and replenishment order quantity is rather small, it is important have frequent shipments divided in suitable intervals. In simulation model, this could be done e.g. with the use of “pulse train” function or incorporating pipeline on order inventory in order decision. The research findings are valid for a small-scale supply chain servicing small and geographically limited markets with clients assuming high customer service levels (e.g. 24-hours lead time). For bigger markets, the cross-docking based supply chain models are worth considering in simulations.</p></abstract>

Research is based on wholesale and distribution operations of real-life case company, and in this setting, the most critical part of company’s supply chain is the inventory replenishment to warehouse (Distribution Center) as well as fulfilling and delivering customers’ orders. Different Economic Order Quantity (EOQ)-based models have been considered (Reorder Point, Reorder Point with pipeline on order inventory, and “pulse train”). Simulation system evaluates annual total logistics costs. Results show that in an environment, where local warehouse inventory levels are rather high and replenishment order quantity is rather small, it is important have frequent shipments divided in suitable intervals. In simulation model, this could be done e.g. with the use of “pulse train” function or incorporating pipeline on order inventory in order decision. The research findings are valid for a small-scale supply chain servicing small and geographically limited markets with clients assuming high customer service levels (e.g. 24-hours lead time). For bigger markets, the cross-docking based supply chain models are worth considering in simulations.

Modelling Wholesale Company’s Supply Chain Using System Dynamics

Tallinn University of Technology (Taltech)

Transport and Telecommunication Journal

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Modelling Wholesale Company\u2019s Supply Chain Using System Dynamics"}

Research is based on wholesale and distribution operations of real-life case company, and in this setting, the most critical part of company’s supply chain is...

Modelling Wholesale Company’s Supply Chain Using System Dynamics

Published Online: Apr 30, 2020

Page range: 149 - 158

DOI: https://doi.org/10.2478/ttj-2020-0012

Keywords
Logistics costs, inventory replenishment models, supply chain simulation, system dynamics

© 2020 Ain Kiisler et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Modelling Wholesale Company’s Supply Chain Using System Dynamics

Published Online: Apr 30, 2020

Page range: 149 - 158

DOI: https://doi.org/10.2478/ttj-2020-0012

KeywordsLogistics costs, inventory replenishment models, supply chain simulation, system dynamics

© 2020 Ain Kiisler et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Logistics costs, inventory replenishment models, supply chain simulation, system dynamics