Research Of The Multi-Location Inventory System Based On System Dynamics

Under a background of global manufacturing and global operation, the inventory scale expands and the inventory structure becomes more complex. Literaturally, more and more attentions are paid on the distributed inventory consisted of multiple nodes. Efficient policy for distributed inventory management will become a key strategy for enterprise to enhance its competitiveness effectively. In this paper, the inventory control policy for distributed inventory system with emergency lateral transshipment is researched based on system dynamics (SD) simulation. Taking a typical distributed inventory system as an example, the validity of the distributed inventory control strategy proposed in this paper is verified by the SD simulation experiment and numerical analysis. The main contents of this paper include:(1) On the basis of Chen(1997)’s HDDI(Hierarchical、Distributed、 Dynamic Inventory Management Scheme)Inventory Management mode, HDDI(R,Q)(E,Qe)distributed Inventory control strategy is proposed:For an inventory system with N retailers and N warehouse, the distributed inventory system is built according to HDDI’s Hierarchical, regional Management mode. In the system, when a node’s inventory level is lower then the reorder point R and greater than the emergency lateral transshipment point E (E<R), it sent a replenishment order to its upstream node for Q quantity goods; when its inventory level is lower than E, it sent a emergency lateral transshipment order to other node in the same region for Qe quantity goods, and the transshipment counterparty is determined by a cost function. Taking a typical distributed inventory system with two warehouses and five retailers as an example, the effectiveness of the HDDI(R,QXE,Qe) strategy is verified by SD simulation experiment.(2)In order to further enhance the operational efficiency of the distributed inventory system, a hybrid strategy of HDDI(R,QXE,Qe) strategy combined with CONWEP is proposed. Taking a typical distributed inventory system with two warehouses and five retailers as an example, the validity of the hybrid strategy to further improve the system performance is verified by SD simulation experiment.(3) In order to verify the effectiveness and feasibility of the two strategies(HDDI (R, Q)(E, Qe) strategy and CONWIP HDDI (R, Q)(E, Qe) hybrid strategy) in solving practical problems, taking the distributed inventory system in our food security reserves as an application case, the distributed grain system under different strategies is simulated base on SD. The result shows that the stability and robustness of our country’s food security reserve inventory system can be promoted by HDDI (R, Q)(E, Qe) strategy and hybrid strategy have strong ability of disaster relief, impact resistant in pulse demand scenarios.