Title: System dynamics simulation model for inventory optimisation of manufacturers: a case study in electrical industry

Authors: Maryam Mofarrahi; Masoud Rahiminezhad Galankashi; Syed Ahmad Helmi; Farimah Mokhatab Rafiei

Addresses: Department of Materials, Manufacturing and Industrial Engineering, Faculty of Mechanical Engineering, Universiti Teknologi Malaysia, Skudai, Johor, Malaysia ' Department of Industrial, Mechanical and Aerospace Engineering, Buein Zahra Technical University, Buein Zahra, Qazvin, Iran ' Department of Materials, Manufacturing and Industrial Engineering, Faculty of Mechanical Engineering, Universiti Teknologi Malaysia, Skudai, Johor, Malaysia; Center for Engineering Education, Universiti Teknologi Malaysia, Skudai, Johor, Malaysia ' Department of Industrial Engineering, Tarbiat Modares University, Tehran, Iran

Abstract: System Dynamics (SD) is an approach to understand the behaviour of complex systems over the time. Although SD has been applied in different areas, its integration with fuzzy inventory optimisation is less investigated. In addition, customers' demand fluctuation is a significant factor in inventory optimisation which is not studied in previous literature. Therefore, this study applies SD to consider customers' demand fluctuation and improve the inventory level of companies. Particularly, a SD model is constructed in iThink software to represent the inventory level of the companies. Following, the Stock and Flow Diagrams (SFDs) are applied to represent the structure of the system. Next, three variables of demand variation, demand average and the highest demand are modelled in Matlab Simulink fuzzy controller to optimise the inventory. According to the obtained results, the inventory level of the considered case study is optimised by applying the developed model. Finally, obtained results are compared with the current inventory level of the company and some managerial implications are suggested.

Keywords: inventory optimisation; system dynamics; iThink software; Matlab Simulink.

DOI: 10.1504/EJIM.2023.131364

European Journal of International Management, 2023 Vol.20 No.2, pp.167 - 193

Received: 25 May 2018
Accepted: 26 Mar 2019
Published online: 09 Jun 2023 *

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