Development of Performance Simulation Model by Making Indices of Supply Chain Capabilities

Abstract

A supply chain (SC) is an organization in which multiple companies cooperate in supply functions, e.g., moving information or materials. Previous studies of SC designing and planning are categorized by their planning time periods into three categories, e.g., strategic, tactical, and operational. Top-down design of an SC, where design decisions are made in the sequence of strategic, tactical, and operational, is rational because of preventing rework of design work. But as few models supports strategic decision making quantitatively, top-down design of an SC has not been realized. In the present study, a method of quantitatively expressing SC’s capabilities of flowing information and materials and simulating its performance is developed. The method is then implemented with a system dynamic model to evaluate, qualitatively and quantitatively, the effectiveness of the model.