Development of A Multi-Objective Optimization Via Simulation Approach for Inventory Control Systems and Supplier Selection
Ayşe Tuğba Dosdoğru Aslı Boru Mustafa Göçken
AbstractInventory control models are one of the most mature fields in the area of supply chain management but it is not obvious how to extend inventory control models under different types of problems where each problem has specific features and includes many different limitations and constraints. In addition, the dynamism of the real-world interactions occurring in inventory control systems should be modeled with much details, realities, and complexities. At this point, Simulation Optimization (SO) models along with modern computing power provide a significant opportunity to respond effectively in a dynamic and stochastic environment. To remain competitive and viable in today’s business climate, SOcan be explicitly taken into account as a complementary tool. In this study, SO is used to develop a multi-objective search for the inventory control system with supplier selection where objectives of the SO model are minimizing total supply chain cost and maximizing average service level. The optimal values of the initial inventory, re orde r point, and order-up-to level for supply chain members are determined by proposed SO model. The proposed model has an ability to analyze dynamics of the supply chain members and to transform it into a clear structure for supply chain decisions. This is very important in real-world settings because proposed models lead to a large number of variants to manage a wide range of decisions in the supply chain.