A Micro Simulated and Demand Driven Supply Chain Model To Calculate Regional Production and Consumption Matrices

Abstract

Detailed data on regional goods production and consumption are traditionally the starting point to model freight transport on a nationwide scale. The conversation of those goods afterwards into various vehicle load types and the different logistics operations needed to deliver the requested goods type and quantity, follow from that starting point in the modeling process. In this paper, a demand driven microsimulated supply chain model is presented. The model shall be a first step towards calculating realistic production and consumption matrices. So far, government provided data has been used as the base to model freight transport for Flanders. The methodology used and accuracy level of this data is not clear. Modeling demand and production relations shall constitute a starting point towards an agent based freight model under development. The presented model is a microsimulation model incorporating the main firms(firms) of a traditional supply chain. It is a demand driven model using quantity of goods requested at the consumer side as a starting point. The model distinguishes also between shipping and carrying firms and takes into account raw material suppliers able to supply all or some subcomponents needed by production firms. Economic Order Quantity (EOQ) relations are used with modifications to include transportation and labour costs. The model is based on an optimized universal cost function and different initial conditions can be used to mimic real life firm to firm interactions. A certain good demand scenario is simulated and results are shown.

The various operations of production, distribution and consumption of goods make up supply chain networks. The usual pre requisite to model freight flows on between geographical zones, is an understanding of intra zonal production and consumption relations. This is in essence an aggregation of all individual firm to firm interactions taking place in form of production and consumption of goods, as well as transportation firms involved in the goods exchange process. In this paper, a demand driven micro-simulated supply chain model is presented. The presented model is a microsimulation model modeling the main firm types present in a traditional supply chain. It is a demand driven model using quantity of goods requested at the consumer side as a starting point. The different interacting firms use a modified Economic Order Quantity (EOQ) model as the basis of the simulation process. The cost function used includes also transportation and labor costs. The model simulates also shipping and carrying firms and takes into account raw material suppliers able to supply all or some subcomponents needed by production firms. Different initial conditions can be used to mimic real life firm to firm interactions. Firm level and zone level scenarios are simulated and results are shown.