Evaluation of risk in supply chain management using stochastic simulation models

Abstract

Today, companies around the world are striving for a competitive advantage with their competitors, improving the performance of their supply chain. Global supply chain networks need guidance strategies for managing the material, information and financial flows in which these businesses operate. This is a challenge for supply chain management. Supply chain management has become one of the most important issues for managers. Many different simulation tools have been developed for this management, with the main advantage being the analysis of complex systems and the offer of alternatives for their management. Modeling and simulation have their own development process in which data is collected, a model is constructed that simulates a complex real system, and the process is defined. A very important factor of the process is the validity of the data, the model that simulates a real complex system and the process of the simulations. Feedback of outcomes using what-if scenarios leads to analysis process and modeling. Modeling and simulation give supply chain management the opportunity to see what strategies and options they can have in a real system, and with testing they can simulate seeing the results of those choices before applied.