Proceedings of the Seventh International Conference on Simulation in Industry and Services pages:19-35
International Conference on Simulation in Industry and Services edition:7 location:Brussels date:4 December 2009
This paper presents a case study on simulating four well known inventory policies on real-life data of a large pharmaceutical company in Belgium. We describe detailed procedures for applying these policies and calculating the corresponding costs and backorder levels. The results indicate a strong trade-off between costs and backorders with none of the studied policies being dominant or dominated with respect to both costs and backorders. Other results include a measure of the total cost sensitivity to the holding cost percentage and a lower bound on the total costs, provided by applying the Wagner-Whitin model.