Modeling and Simulating Supply Chain Management

Uncertainty in Supply Chain Management can lead to unsuitable services to customers, but it can be overcome through having an emergency inventory. Due to high costs of inventory, a general inclination exists towards a minimum inventory. So, one of the objectives of Supply Chain Management is to coordinate all activities throughout the chain, so that simultaneously with reducing commodity inventory, they can be supplied to customers when is needed. In addition, it is required that negative effects of changes in demand on order rate to be decreased. If order rate is considered constant, large changes will be seen in the inventory which will cause increase in inventory costs. Also, if the inventory is considered is considered constant, it will cause unstable production processes which will lead to increase in production costs. Existing static models for Supply Chain Management seem to be insufficient encountering with dynamic specifications of the supply chain system. The present article uses linear control method and transfer function analysis to offer a method for modeling Supply Chain Management in continuous-time condition in order to provide the best situation for exchanging order rate and inventory. Simulation has been conducted using Vensim software and results have been described. 818 A. Toloie Eshlaghy and M. Razavi