Discrete-Event Simulation of Production and Sales Processes in a Company

International Journal of Economics, Commerce and Management, Vol. 1, Issue 2, 2013

10 Pages Posted: 20 Jan 2014 Last revised: 2 Feb 2014

See all articles by Volodymyr Kravchenko

Volodymyr Kravchenko

Donetsk National University; Zaporizhzhya Institute of Economics and Information Technologies

Date Written: December 1, 2013

Abstract

A company, facing growing backorders, repeated failures, complaints and other problems in performance, losses profits and time. Therefore, managers need to put and solve complex strategic alignment issues concerning how business processes can be improved as well as what results would be achieved by such strategies. Present paper uses customer order decoupling point and inventory control policy as primary managerial tasks for the alignment of production and sales processes. The solution of these tasks ensures production line balance, supports reliable and efficient customer relationships, and, in particular, orders fulfilment. To verify the solutions’ ability to shorten costs and sales loss, computer-aided discrete-event simulation is chosen as scenario analysis tool. In the paper, Arena simulation models represent manufacturing system in make-to-stock manner according to customer order decoupling point and implement periodic inventory management policies with backordering and loss of sales, such as line balancing and basic stock, checking threshold, and combination thereof. The models are managerial tool for decision-making, providing verification of business strategies by parametrical study of non-stationary customer demand.

Keywords: Discrete-Event Simulation, Production, Sales, Inventory Management, Problem Solving

JEL Classification: E27, M11

Suggested Citation

Kravchenko, Volodymyr, Discrete-Event Simulation of Production and Sales Processes in a Company (December 1, 2013). International Journal of Economics, Commerce and Management, Vol. 1, Issue 2, 2013, Available at SSRN: https://ssrn.com/abstract=2381289

Volodymyr Kravchenko (Contact Author)

Donetsk National University ( email )

Universitetskaya str., 24
Donetsk, 83001
Ukraine

Zaporizhzhya Institute of Economics and Information Technologies ( email )

Kiyashko St., 16b
Zaporizhzhya, 69015
Ukraine

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