The production and distribution of products often take place in global supply chains that consists of various production plants and warehouse locations. Produced articles are in many cases distributed over several tiers from the plant to customer sites. Within the inventory management the operator of such a distribution network needs to determine the level of inventory for every item and warehouse location. Suitable distribution processes also need to be selected and parameterized in this context. Here ordering schedules, order quantities, reorder points and target inventories are determined.
In business practice distribution processes and their parameters are often only adjusted in long intervals, for example when a new ERP software is implemented. However this approach is not suitable for present supply chains. Changes in demand patterns and shorter product life-cycles call for frequent adaptations of distribution parameters.
Therefore our approach of the dynamic inventory disposition goes one step further. Within the scope of the tactical and operative planning, the effects of various future scenarios on relevant cost and performance figures can be evaluated with a simulation tool. Furthermore different inventory strategies and disposition processes can be evaluated via simulation in terms of their effects on inventory and service level. Thus we create the conditions for a timely and robust service level management in logistic networks.