International Journal of Applied Management and Technology
This paper deals with the application of stochastic inventory model to the three-tier supply chain and verifying the values obtained by mathematical model with discrete event simulation. We investigate three-stage serial supply chain with stochastic demand and fixed replenishment lead-time. Inventory holding costs are charged at each stage, and each stage may incur a consumer backorder penalty cost charged by primary supplier to secondary supplier. The customer-demand follows Poisson distribution. We implement Base Stock model for inventory control at both suppliers. Computer simulation is then designed in such a way that it satisfied all the assumptions for mathematical model. Simulation is run to validate the results obtained from the mathematical model.
Original Publication Citation
Verma, A. K. (2007). Stochastic models for enhancing agility of supply chains. International Journal of Applied Management and Technology, 5(2), 34-43.
Verma, Alok K., "Stochastic Models For Enhancing Agility of Supply Chains" (2007). Engineering Technology Faculty Publications. 52.