Development of a dynamic simulation model for inventory level optimization through supply chain

Abstract

System dynamic is an approach to understanding the behavior of complex systems over time. Current research on system dynamics modeling in supply chain management focuses on inventory decision and policy development, time compression, demand amplification, supply chain design and integration, and international supply chain management. Less attention has been devoted on the inventory level improvement with fuzzy demand controller in dynamic simulation model. This study is aimed to consider customer demand fluctuation to improve the finished goods inventory level of Electronic Company by using dynamic simulation model. Dynamic and changes in demand and corresponding excess during time through the product life is considered as serious problems in supply chain. Data collection and analysis have been considered to find the current problems of the company. Dynamic model has been constructed by ITHINK software to represent the inventory level of company. The stock and flow diagrams are become visible to represent the structure of a system with more detailed information. Three different variables have been applied in Fuzzy controller to give the better level of inventory by MATLAB SIMULINK. Generated results have been compared by current company inventory level in ITHINK software and the best alternative was selected to suggest the company management.