Assessing the Expected Benefits of Electronic Data Interchange through Simulation Modelling Techniques

This paper presents the development of a simulation model for the assessment of the expected benefits from the implementation of EDI. The model simulates trading between a number of companies at three sequential stages of production. The simulation keeps track of inventory levels in order to assess the efficiency gains on inventory management introduced by EDI. This model has been applied to three industries in Greece: textiles, pharmaceuticals and supermarkets. The paper documents the development of the simulation techniques and the inventory management and trading models used. The merits of the approach are assessed, avenues for further research are explored and the managerial implications are finally discussed.