Performance evaluation of inventory replenishment strategies in a capacitated supply chain under optimal parameter settings Online publication date: Tue, 08-Jun-2010
by Chandandeep S. Grewal, Paul Rogers, S.T. Enns
International Journal of Value Chain Management (IJVCM), Vol. 4, No. 3, 2010
Abstract: In this paper, the reorder point and Kanban replenishment strategies are compared and their performance is evaluated under the optimal decision variable settings for each strategy. A discrete-event simulation model of a simplified supply chain scenario is developed and simulation-based optimisation is used to find the optimal settings that minimise the average total inventory subject to a specified minimum customer service level. Changing the service level constraint allows results to be generated for multiple points along a performance trade-off curve. When such optimal trade-off curves are constructed for each replenishment strategy, these curves can be compared to evaluate relative performance over a range of service levels. Results show that the reorder point strategy dominates the Kanban strategy under optimal decision variable settings for the simplified supply chain being studied.
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