Scenario-based simulation in production-distribution network under demand uncertainty using ARENA

Supply Chain Management (SCM) has improved company´s competitive strategy during last decades undoubtedly. Production distribution (P-D) network, as a part of supply chain network, has considerable effect on whole profitability of companies, because customer experience and supply chain cost are affected by P-D network directly. A lot of mathematical models have been applied to do optimization on supply chain networks, but supply chain dynamics, such as uncertainty in production demand and transportation, are not present in most of them. As a result, to handle this variation, simulation can be a powerful tool. In this study, a simulation study is performed to analyze system performance based on different network configurations using transportation cost and transportation time as the performance criteria. We provide a scenario-based simulation for evaluating of different production-distribution network performance in automotive manufacture by using simulation. Finally, a mixed integer linear programing (MILP) has been applied to select the best network configuration.