Performance Evaluation in a Supply Chain Network Using Simulation: Application of Simulation in Supply Chain Networks Under Stochastic Condition

Supply Chain Management has become companies? strategy to improve their competitiveness certainly. Fast changing of the world, both internally and externally, has forced some companies to make decision to relocate their facility or reassign their functions to various facilities. A lot of mathematical models have been used to do optimization on supply chain networks, whereas supply chain dynamics, such as production uncertainty, demand fluctuation and transportation instability, are not present in most of the mathematical models. On the other hand the complexity in evaluation of performance parameters, in the mathematical models, provides necessity for simulation study as a flexible model to evaluate such criteria readily. This research provides a systematic way to evaluate production distribution network performance with respect to some performance factors under ARENA simulation software. The main objective is to evaluate different networks based on the transportation time and transportation cost as performance factors.