Applying Simulation and Mathematical Programming on a Business Case Analysis for Setting up a Spare Part Logistics in the Construction Supply Industry－A Case Study

摘要

This paper describes how methods and techniques from different fields of research can be combined to evaluate cost-intensive and business-critical decisions regarding future market development. In their concrete application a leading company from the construction supply industry has to make a decision on setting up of a spare part logistic. Three future alternatives (negative, constant, positive market growth) on market trends are simulated with a Monte Carlo simulation by considering a given demand history and possible locations for storage facilities were isolated by applying the Steiner-Weber method. Finally solving a mixed-integer, formulation of the Uncapacitated-Facility-Location-Problem gives information on opening/closing new/existing storage facilities by minimizing all relevant costs. The results of this approach, containing information about a cost-based evaluation of all business related decision criteria, were examined with a sensitivity analysis.