| In order to boost its economy,Rwandan government has started a strategy of increasing the market for products that are made in the country.However,it is still difficult because products are only sold on traditionally market because E-commerce is still unpopular in the country.Therefore,it is very hard to target both local and international market.E-commerce in Rwanda is still facing issues of inability to meet customer demand on time.Satisfaction of customer demand is a concern to retailer due to high operating cost which is mostly caused by customer fluctuation demand which lead to holding too much inventory in the stock.This cost is due to poor replenishment plan.When retailer incur a higher cost,they decide to cut down their inventory ordering quantity.On another hand,when customer cannot be satisfied on time,they move to traditional retailers.This reduce the service level of the company.Therefore,it is important to balance the cost of holding inventory and the stockout cost to minimize the total inventory cost while increasing the service level.With the use of a case from an online company called KASHA that operates in Rwanda,(R,s,S)inventory policy and simulation modelling using AnyLogic was used to improve the inventory control efficiency of the company.The simulation modelling and the optimization experiment results provided three optimal parameters that minimize the total cost while ensuring a higher service level.The(s,S)optimal parameters with the lowest inventory cost was found to be(852,1513)with a service level of 95%.The results has shown that a combination of(R,s,S)Inventory Policy,simulation modelling and optimization experiment is able to find optimal combination of target inventory and reorder point that can maintain certain service level while minimizing the inventory cost.For further research,future researchers should focus on the application of the used methodology to more complex situation like multi-echelon with multiple items. |
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