We consider a supply chain with toothbrush Factory and two sites supplying customers from the USA. The demand is distributed stochastically and is proportional to the population of the cities. Some customers order toothbrush every day, others once in two weeks.
The demanded quantity of toothbrushes is evenly divided between the two sites, which have different inventory replenishment policies: one site orders products when the inventory level falls below a fixed replenishment point, the other one orders products based on calculated inventory forecast for the horizon period.
The goal is to compare different inventory policies and choose the one that helps to maintain a sufficient inventory level when we do not know the amount of product that can be demanded.The result of the experiment shows that we obtain the better service level when we estimate expected customer demand for certain products over the specified period of time, than when we set fixed replenishment point for inventory level.
Importing examplesRunning the Simulation experiment