Supply chain spreadsheet simulation optimization

Abstract

This paper analyses the performance of Excel spreadsheet simulation analysis on supply chain. The spreadsheet was used to model the inventory control issue that developed in order to minimize the total cost of inventory, shortages and transportations for single supplier multi retailer problem who face a stochastic demand. Thus, the aim of this study is to identify the most appropriate inventory control parameters (by using can-order policy) for each of the retailers. The inventory position was periodically reviewed. In order to optimize the simulation model, the concept of Scatter Search and Tabu Search algorithms was used by implementing OptQuest software in spreadsheet. Two simulation models were set with different distribution of demand pattern in order to analyze the performance of the Optquest tool and compared with exact solution generated by brute-force approach. The result showed that the combination of inventory parameters produced by OptQuest close to the exact value obtained by brute force approach.