Basic structure of the simulation model

Since the simulation is run twice, the final values displayed by the simulation are the differences between the status before and after an SCI s implementation in terms of inventory and related costs. Subsequently, the mathematical formulas aligning the model are exposed according to the stated subsets. A selection of the main variables is shown in Table B-1 in Appendix B. 

Proceeding from the detailed consideration of the material flow, the company s finished goods are segmented into three freely definable categories Pu Pi and P3. For instance, the segments can be chosen in terms of the products revenue contribution or demand pattern. The average demand for Pj, P2 and P3 that the company is facing per day is described by factor. The allocation of d on the three product 

The average demand responds to orders per day. The extent to which the orders per day vary from average can be set by the relative tolerances and for 

The way in which orders for P/, P2 and P3 are placed by the customer can be chosen independently in terms of a regular (a), seasonal (b) and irregular (c) demand pattern (Simchi-Levi et al 2008 35 Vohra, 2007 466). Whilst the following sections refer to product type Pi, they can be adopted for the other two product types P2 and P3 analogously  

The generation of regular demand within the model is grounded upon the average order frequency and quantity for P/, The average munber of orders per day for Pj is defined as. In order to consider a deviation in average order frequency, 

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