Innovative inventory pooling system based on computing and optimization techniques

Abstract

Monte Carlo Simulation method is a famous and well known technique, which can be effectively used to solve inventory management problems in many industries. Thus, this study combines not only computing but also optimization techniques to provide the most optimal solution for solving inventory problems of sport retailers in Thailand. The purpose of this study is to determine the optimal system service fee for Innovative Inventory Pooling System (IIPS) by maximizing the increment of system service income and total profit. The simulation model has represented the inventory levels of sports retailers comparing between the traditional models and pooling model. Employing Monte Carlo Simulation (MCS), the simulation model establishes the opportunity for reducing cost of lost sales, and creating the profit and system service income. Therefore, three specific factors are discussed in this study. A simple equation to find the optimal system service fee for IIPS is definitely developed. Finally, the result will be presented to demonstrate the maximized system service fee and it will also use the results obtained for designing and developing the system in order to help create the maximum sustainable usability in the future.