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
Date Written: December 1, 2013
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: Suggested Citation