A simulation tool for supply chain design and optimization

This paper aims at quantitatively assessing the effects of different supply configurations on total supply chain costs and bullwhip effect. To achieve such aim, a discrete-event simulation model is developed, reproducing a Fast Moving Consumer Goods (FMCG) supply chain, and several supply chain configurations are examined. They derive from the combination of the following supply chain design parameters: (i) number of echelons (from 3 to 5); (ii) number of players per echelon. The inventory management policy considered is Economic Order Quantity (EOQ). The simulation model proposed in this paper was developed under Microsoft Excel™. It can thus be considered as of pedagogical value because of its ease of applicability and simplicity. Moreover, the model introduced is of straightforward application by both practitioners and students. The ease of the applicability is confirmed by the suitability to adopt widely employed software, such as Microsoft Excel™, to implement the model developed. Relevant simulation outcomes are presented and discussed to provide useful insights and suggestions to optimize supply chain design.