Design, Analysis and Optimization of Supply Chains

Chapter 4

Using System Dynamics to Evaluate a Push-Pull Inventory Optimization Strategy for Multitier, Multichannel Supply Chains

Introduction

Demand planning is a harsh reality because of a simple and straightforward fact: the forecast is always wrong.¹ Demand forecasting is especially challenging for products such as aviation spare parts with long production lead times (PLTs), unknown future operating environments, and uncertain political developments. This fundamental forecasting and planning requirement has been a problem for the proper management of government supply chains for half a century or longer.² Inventory shortages and back orders frequently afflict government supply, although excess inventory has caused unnecessary expenditure ...