Simulation workbench for analysing multi‐echelon supply chains

Abstract

End‐user demand information suffers from delay and distortion as it moves upstream in a supply chain. Co‐ordination between organisations in the supply chain, through sharing of demand information, is a possible solution to counter this distortion. Modelling and analysing supply chains, however, is not an easy task, as the supply chains contain multiple echelons and are faced with uncertain demand and lead‐times. For multi‐echelon supply chains adopting different inventory and forecasting policies at the echelon level, simulation is the most appropriate analysis tool. In this paper, we describe the development of a simulation workbench for modelling and analysing multi‐echelon supply chains. The workbench facilitates study of inventory and forecasting policies practised by the echelons, and models different information exchange mechanisms adopted by them. An experiment conducted, to test the workbench and demonstrate its capabilities, confirms that the workbench is a useful tool for gaining valuable insights into information exchange in a particular supply chain.