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Deteriorating Stock Planning Model - Supply Chains

745 runs

Added by Maxim Rojkov

Application area: Supply Chains Management, Logistics

Simulation method: Agent Based

Deteriorating Stock Planning Model

The model simulates the planning algorithm used for forecasting shipments of product with relatively short product life.
The product is produced by contractor manufacturer and that's why the planner should forecast stock situation a few weeks ahead -
urgent orders are not allowed. Simulation length: 1200 weeks

There are two groups of customers (Group A & Group B) which have different requirements to remaining shelf life of the product.
The shipments are made with FEFO (First Expired - First Out) policy for both groups of customers, which make the planning process even more
complicated. The planning algorithm considers that the stock is deteriorating and that the batch, which can be shipped now may be wasted in a
few weeks. There are two initial batches.

Actual demand for a period may differ from the forecasted one. The demand variation is modelled via uniform distribution.
Besides, there can be some random "trends" at the market lasting for 4 periods, which change the demand additionally.
The base time unit is a week - it's assumed that the planning is made every week, but some parameters are measured in days.

The purpose is to eliminate out of stocks and wastage in turbulent market environment while keeping the algorithm relatively simple.

The model was created with AnyLogic - simulation software / Supply Chains Management, Logistics

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