Comparison of inventory policies for multiple products at warehouse : a simulation study

Name: Praewa Waenthong

keyword: Inventory policies

; Inventory management

; Comparison

; Simulation study

Abstract: This study compares the performance of two inventory control policies: the order-up-to-level (s, S) policy and the order-up-to (T, S) policy. The analysis was conducted using a simulation model based on real weekly demand data for three products distributed from a central warehouse to multiple retailers. For the (T, S) policy, two review periods, T = 1 and T = 2 weeks, were tested. Each policy was evaluated using two methods. Method 1 applies Excel Solver with a fill rate constraint to determine inventory parameters, while Method 2 uses a formula without applying the constraint. The simulation covers two years of data. The first year was used for parameter optimization, and the second year for testing performance under demand variability. Performance was measured using average total cost, average fill rate, coefficient of variation (CV), and bullwhip effect (BWE). Results show that (T, S) T = 1 Method 2 achieved the lowest average total cost across both years, making it the most cost-efficient option. In contrast, (T, S) T = 2 Method 1 achieved the highest fill rates, offering more stable service performance. The (s, S) policy delivered consistent results in some cases but experienced the highest cost increase under rising demand variation. When considering product-level performance, (T, S) T = 2 Method 2 provided the best control over order variability and demand fluctuation. These findings highlight the importance of selecting inventory strategies based on both cost efficiency and service level priorities under different demand patterns.

Thammasat University. Thammasat University Library

Address: BANGKOK

Email: preserv@tu.ac.th

Name: Aussadavut Dumrongsiri

Role: advisor

Created: 2025

Modified: 2025-11-25

Issued: 2025-11-25

วิทยานิพนธ์/Thesis

application/pdf

DOI: 10.14457/TU.the.2024.525

eng

DegreeName: Master of Engineering

Level: Master's Degree

Descipline: Logistics and Supply Chain Systems Engineering

Grantor: Thammasat University

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