A simulation approach for production-distribution planning with consideration given to replenishment policies

Abstract

One of the key issues in the current research area of supply-chain networks is a production-distribution plan taking into account a multi-facility, multi-product, and multi-period problem. The purpose of this study is to determine the optimal production-distribution plan in a network with a bill of material (BOM). First, we present a mathematical model to determine the capacities of facilities including the manufacturing plant and distribution center (DC). Next, with consideration given to the uncertainty and complexity of solving such a network, we apply a simulation approach. The simulation model is developed to analyze a production-distribution plan that satisfies customer demands for higher customer satisfaction and lower total relevant costs, while taking replenishment policies into consideration . The computational results for a simple example of the network represent the developed mathematical and simulation model and show the prospects of using this approach. The multi-factor analysis of variance (ANOVA) test results clearly indicate that all three factors have a significant effect on the grouping output.