Integrating inventory and transport capacity planning in a food supply chain

Abstract

The general objective of this paper is to simulate a supply chain to assess the effects that different inventory management policies and transport capacity systems have on costs (transport) and service levels (stockouts). This paper specifically aimed to facilitate the decision-making process about planning distribution capacities, particularly when contracting a transport fleet in a supply chain under uncertainty with a 1-year time horizon by evaluating different types of scenarios, which vary depending on availability of vehicles and obtaining vehicles. The system dynamics simulation model was applied to a real-world food supply chain and can be adopted by chains related to diversified cropping systems. The results provide the best decision alternative in terms of costs and inventory levels by considering the transport capacity life cycle, the time to acquire additional transport capacity, the reorder point in days of stock and the target inventory.