Complexity: grade grade grade grade grade

Modeling approach: agent-based

Features: Fluid library Process Modeling library AnyLogic Cloud 2D Optimization

For this tutorial, we will develop a supply chain between an oil factory, a retailer, and 500 oil change stations.

• The factory produces oil only on demand, one order at a time. Each order has some setup time, then there is production time per barrel.
• The oil change stations consume motor oil at a certain rate. Each station holds and orders 1 barrel at a time.
• The retailer delivers oil to the stations, maintains an inventory of oil barrels, and orders replenishment from the factory. There is an inventory policy, implemented as (S, s)

We will build a model with the objective of finding optimal inventory policy parameters that ensure minimum inventory for the retailer and a certain quality of service.

For simplicity, we will assume that there is an immediate delivery between locations in the model. You can adjust this parameter when the model is complete to better reflect your needs.

We also will be using default, abstract volume and time units; this can also be adjusted in the finished model.

• Each station consumes oil at a constant rate; however, the rate varies from station to station: uniform( 0.2, 0.8 ) vol. units / time unit. The initial amount of oil at a station also varies, distributed as uniform( 5, 20 ) vol. units; the maximum amount of oil at a station is 20 vol. units.
  When the oil level reaches 5 vol. units, a station orders the next barrel from the retailer. The capacity of a barrel is 15 vol. units.
• Upon receiving an order from a station, the retailer immediately ships a barrel, if it is not out of stock. Otherwise, the retailer maintains a backlog of orders.
  The above (S, s) inventory policy means that when the inventory falls to s or below, the retailer places a replenishment order to bring it back to S.
  The storage capacity of the retailer is 500 barrels. Initially, his inventory level is S.
• The factory produces on demand only, one order at a time. The total production time consists of the constant order setup time of 2 time units plus the item production time of 0.04 time units per each barrel.

We will strive to minimize retailer inventory over time, while keeping the maximum number of stations out of oil below 1% at all times.

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