Page 150 - Data Science Algorithms in a Week

134 Alfonso T. Sarmiento and Edgar Gutierrez

SD Model

The nonlinear SD model used in this case study is a subsystem of the enterprise
system developed by Helal (2008). It is focused on the production process of PMOC and
is composed by the following submodels: (1) supplier submodel, (2) labor management
submodel and (3) internal supply chain submodel. These submodels are described and
depicted below.
The supplier submodel (Figure 2) represents how the capacity of the supplier affects
the rate at which the company orders raw materials (Parts Order Rate). To simplify the
model it is assumed that only one supplier provides raw materials to PMOC. The state
variables of this model are Supplier Production Capacity and Supplier Order Backlog.
The labor management submodel (Figure 3) estimates the required capacity level
(including overtime when necessary) based on the production rate obtained from the
production planning. The opening positions for recruiting new workers are represented in
the state variable Labor Being Recruited. Labor being recruited moves to become Labor
(get hired) after some hiring delay, according to the Labor Hiring Rate. Similarly, Labor
can be fired o leave voluntarily the company at the Labor Firing Rate.

Figure 2. PMOC model: Supplier submodel.