Research on Optimization and Simulation of Multi-echelon Inventory of Chain Retail based on System Dynamic

China Business and Market - - CHINA BUSINESS AND MARKET - ZHAO Chuan and ZHANG Hao


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(Beijing Technology and Business University,Beijing100048,China)

Abstract:In order to solve the problem of high inventory level,expensive inventory costs and low efficiency of inventory turnover in chain- retail industry due to inaccurate demand forecasting,inefficient reorder time and undynamic replenishment, we,from the view of system dynamics,proposed a multi-echelon inventory collaborative management model which consists of branch stores,distribution centers and suppliers. The raw data of inventory from a real chain retail company was collected to validate and simulate the proposed model on Vensim. Sensitivity analysis was carried out to optimize adjustment period,delivery time,demand forecast weight,safety inventory and other parameters. Results show that the proposed model can produce a lower inventory level,a more efficient inventory turnover rate and a lower inventory cost for multi-echelon inventory in retail chains.

Key words:system dynamics;chain retail;multi-echelon inventory optimization;Vensim

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