Unifying simulation and optimization of strategic sourcing and transportation

Proposed and developed is a framework and an extensible library of simulation modeling components for strategic sourcing and transportation. The components include items, suppliers, volume-discount schedules, aggregators, procurement rules, and less-than-truck-load delivery. Service models are classes in the Java programming language extended with decision variables, assertions, and business objective constructs. The optimization semantics of the framework is based on finding an instantiation of real values into the decision variables in the service object constructor, that satisfies all the assertions and leads to the optimal business objective. The optimization is not done by repeated simulation runs, but rather by automatic compilation of the simulation model in Java into a mathematical programming model in AMPL and solving it using an external solver.