System Dynamics Simulation Model of Food Production Inventory Control

摘要

Irregular demand is one of the main attributes, which must be properly treated to determine the economic order quantity of production stocks. The objective of the present paper is to determine stock buffers to cover the difference between the supply of raw material and demand for products considering the economic criteria. Classical static inventory control is not sufficient for ever-changing market demands therefore, the system dynamics model was implemented as a decision support tool for inventory planning and control. The system dynamics model enables the user to analyze the behavior of the real system with the aid of experimenting and intuition. The model building process is supported with the database on account of a large number of parameters included in the model. Different production plan scenarios are tested on the model allowing harmless experimentation and proper decision-making. The process of scenario evaluation is conducted with the multicriteria decision function and expert judgment of the users. The chosen production plan scenario provides the output for the Purchasing Department. Experiments with the model show the practical value of the model as an efficient decision support tool for operational and strategic production planning.