Simulating Inventory Controlling Strategies Of CTO Model

Due to the rapid changes of industrial environment such as global competition and different customer demand, the structure of industrial environment is more and more unstable. Consumers not only ask for reasonable price of products and services, but also ask for quality, variety, personalization and timing. Therefore, the manufactures should reconsider their management style and production system as firm's core competitiveness to respond customers'demand quickly and provide low-cost, various and customized products and services. And then, it becomes an important question for modern industrial and commercial management to reach satisfactory customer's service level with the reasonable cost of stock.This research proposes a model of supply chain using CTO strategy to develop an appropriate inventory policy from the perspectives of service level and lead-time. And an add-in named sensit for Windows Excel is used to derive the suitable inventory policy. Then, this research proves validations of the result of the system by numerical examples and sensitivity analysis.The contents of this research include three main parts, as follows: The literature review of the development of the multi-echelon inventory model and CTO production mode; The setup of a multi-echelon inventory model under multiple suppliers, single manufacturer and multiple retailers in the CTO supply chain system; The sensitivity analysis of decision variables separately in the (s, S, T),(s, Q) and VMI system with undetermined customer needs. And finally, this research finds that, in the variation scope of the decision variables including service level (SL) and lead time, the VMI inventory strategy is prior to two other strategies in the simulation scene of CTO model.