Abstract for: Four Echelon Retail Supply Chain Optimization-insights from Experimenting with Powel’s Hill-climbing algorithm in Vensim©
This study focuses on developing useful and interesting insights into the functioning of four-echelon retail supply chains consisting of Supplier- Manufacturer- Distributor- Retailer utilizing a System Dynamics (SD) model developed with Vensim software (Ventana, 2015). The objective is to understand the response behavior of the supply chain to various changes in customer order patterns and to discern what inventory policies and forecasting policies will help accomplish the retail supply chain goals of “eliminating unfilled orders,” “increase inventory turns,” and “reduce inventory carrying costs,” simultaneously. For obvious reasons, elimination of unfilled orders at the retailer should receive the top priority as that would be the ultimate objective of typical retail supply chains. Our experimentation with the Vensim built-in optimization function provides quite interesting and intriguing results.