SIM Cash to Serve

Problem definition

A smartphone manufacturer wants to determine the cost-effectiveness of each distribution center. This can be done by analyzing operating cash flow, i.e. we need to obtain detailed information on cash flows within the supply chain (including cash on hand, loans, interests, account payable and account receivable) for the period of one year.

We consider a supply chain in Asia comprising:

Transportation is done by: The expected order delivery lead time depends on the destination country: Demand

Demand is of stochastic nature. The order interval on average is 7 days.

Constraints

Initial cash is negative and is equal to the initial inventory value.

Payment deadlines for suppliers are shorter than payment deadlines from customers.

Every distributor's cash account has its own initial cash and payment terms in every country:

Product deliveries to the end customer and between sites are made according to the schedule.

Goal

Analyze operating cash flow, obtain detailed information on cash flows within the supply chain (including cash on hand, loans, interests, account payable and account receivable) for the period of one year.

Сompare the cost-effectiveness of distribution centers in different countries.

Result

The example allows us to simulate financial flows in the supply chain for distributors with different financial inputs.

According to the collected statistics we earn more than we spend:

However, the Cash page shows that not everything is so great.

We reach the break-even point in: Analyze results on:

 

Related topics

Importing examples 

Running the Simulation experiment