Modeling and Simulation of a Multi-Echelon Inventory System for a Manufacture Firm

A typical manufacture firm can be seen as a multi-echelon inventory system. This paper focuses on a multi-echelon inventory system which consists of firm warehouse and multiple distribution spots. And a model has been set forward in order to illuminate the inventory control strategies in a manufacture firm, distribution center and the retail warehouses according to certain fulfillment rate of customer requirement and production constraints of the firm resource and capacity, which aims to minimize the total inventory cost to identify the safe stock, ordering points and ordering quantities. And then simulation software Witness has been used to explain how to optimize multi-echelon inventory of a manufacture industry based on a simplified example.