A Monte Carlo Simulation Approach on Supply Chain Dynamics

Supply chain management (SCM) has been drawn increasing attention in industries and academia. The attention is mainly due to a need to integrate the multiple activities in a process network from the overall perspective under the constantly varying economic environment. While many researchers have been addressing various issues of SCM, there is not much research explicitly handling the overall dynamics of supply chain entities from PSE literature. In this two-part series paper, it is investigated how the overall supply chain processing times vary in response to the variation of individual entities using Monte Carlo simulation. Instead of figuring out the operation levels of individual entities, the overall operation time called TAT(Turn-Around-Time) is proposed as a performance indicator. An example of 7 entity-supply chain is presented to illustrate the proposed methodology.