Modelling and Simulation of Inventory Replenishment Policies and Comparison of Target Days Vs Actual Days of Inventory Held

Anthony Vaz (Malaysia University of Science & Technology School of Transportation & Logistics Jalan PJU 5/1, Garden Strand Office, 47810 Kota Damansara, Petaling Jaya, Selangor Darul Ehsan)
Anwar Tedjamulja (Taman Helinium H2 No. 8, Golf Estate Bogor Raya, Bogor 16711, Indonesia)
Shadi Kafi Mallak (Faculty of Science & Engineering Malaysia Science & Technology Jalan PJU5/1, Garden Strand Office, 47810 Kota Damansara, Petaling Jaya Selangor Darul Ehsan)
Premkumar Rajagopal (Malaysia University of Science & Technology Jalan PJU5/1, Strand Garden Office 47810 Kota Damansara, Petaling Jaya Selangor Darul Ehsan)

International Journal of Supply Chain Management
Vol 9, No 2 (2020): International Journal of Supply Chain Management (IJSCM)

Supply chain managers often apply aggregate planning techniques to develop make or buy decisions or even make for stock versus make to order scenarios for example. These scenarios often contain combinations of inventory holding vs capacity installed. Many supply chain managers have used ‘what-if’ decisions to develop supply chain scenarios to help them determine optimum results in terms of low cost and improved customer service. This study aims to create eight scenarios of varying inventory replenishment policies for one fast moving consumer goods (FMCG) organisation. The aim is to provide the supply chain manager with alternative options for lower inventory and yet be able to service the FMCG businesses at lowest cost. The results show that this allows supply chain managers to pick the scenario that optimises an organisation’s resources and competitive strategy.