Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Simulation Applications in SCM ? Typical Steps in Simulation Consider the example below and let us follow the steps outlined under Process: Best Buy has
Simulation
Applications in SCM
Typical Steps in Simulation
Consider the example below and let us follow the steps outlined under Process:
Best Buy has the following probability distribution of weekly demand for a particular type of DVD The time it takes for the
store to receive an order from its distributor is also given.
Demand of
DVDs
Probability Lead Time Probability
The ROP for the DVDs is The order size The starting inventory
The manager wants to simulate the inventory system for weeks to see how many units of lost sales will result and how many
units are there in inventory on average. This will help her review the performance and change the parameters, if necessary. In
reality, weeks is a very short period for simulation
The Monte Carlo simulation Process
Define problem Inventory control, for example
Construct the simulation model
Specify the parameters
Specify the variables
Specify the decision rules
Specify the probability distribution
Specification of discrete time increments
Determine starting conditions
Runningin period
Stable conditions
Determine runlength
Evaluate results
Descriptive statistics
Statistical tests
Validation and debugging
Animation
Design of experiments
Simulation of the Inventory System
Time
Period
Beg.
Inv.
RN Dem. Sold End.
Inv.
Lost
Sale
Place
Order
RN Lead
Time
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started