In this paper, we present a simulation model for the multi-echelon inventory optimization problems using Arena. In the multi-echelon inventory there are five members: a manufacturer, a distribution center and three retailers. Our analysis concentrates on the relationship between the fill-rates of retailers and the average inventory level of the entire supply chain. We assume that customer's demand is uncertain, as well as the lead times. By using Arena, we provide a better method rather than the traditional mathematical mode to decide the reorder point and order size of the retailers while minimizing the average inventory level of the entire supply chain to some extent.
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