A Simulation Based DSS Design for Supply Chain Management

This study focuses on improvement of supply chain performance in one of the biggest commodity product manufacturers in Turkey. The aim is to generate a tool running as a decision support system (DSS) and provide an easy to use simulation environment for the supply chain managers in decision making. In the current supply chain system the manufacturer offers a discount option if the orders placed by a distributor exceed a certain quota. The quota is determined beforehand and may differ for each distributor according to the mutual agreement. In the "monthly quota" system, the distributors receive a discount for their unit purchasing price, if they reach their individual quota at the end of the month. As an improvement of the current supply chain system, "rolling horizon" strategy is proposed where the quotas are checked every time an order is placed by a distributor. Two simulation models are developed by using ARENA software and integrated into a DSS that uses MS-Excel for data input and output purposes. The DSS environment is used to compare the monthly quota strategy and the rolling horizon strategy with different performance measures