Simulation Based Optimization for Multi-Echelon Pharmaceutical Supply Chain Under Customer Service Level Constraint
Open AccessIn both established and emerging nations, the healthcare industry encounters various challenges in terms of cost reduction and service quality improvement. One of the most significant components of the healthcare system is the $860 billion global pharmaceutical sector, which plays a critical role in enhancing the system’s performance. The pharmaceutical supply chain is a critical component of the pharmaceutical industry’s success.The goal of this praxis is to minimize pharmaceutical supply chain costs while maintaining customer service level. The supply chain consists of two raw material suppliers, a pharmaceutical company that manufactures multiple finished products, a distribution center, and two retailers. An ARENA stochastic simulation model was designed and implemented for a multi-echelon supply chain network to minimize the total supply chain cost under realistic constraints and limitations, including variable lead time, inventory lead time, and customer service level. This simulation model will help to minimize the total supply chain cost by monitoring supply chain subsections and finding the optimal decision values, such as the reorder point and order quantity of raw materials and finished products at each segment of the supply chain network, while achieving the target customer service level. This model will also allow supply chain managers to manage their supply chains based on previous performance to minimize the likelihood of supply chain distribution by simulating various scenarios before applying them in real life.
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Algharbi_gwu_0075A_15721.pdf | 2022-03-06 | Open Access |
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