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Simulation Optimization Using a Hybrid Scheme … 135

Figure 3. Labor management submodel.

The internal supply chain submodel consists of two overlapping constructs. The first
construct is the materials ordering and inventory. The state variables for this part of the
model are Parts on Order, and Parts Inventory. The usage rate of parts (raw material)
being taken from Parts Inventory, to be converted into semi finished products (WIP
inventory) is given by the Production Start Rate. The second construct is the production
planning. This part of the model regulates the WIP inventory at the Preforms and Presses
departments to ensure smooth production rate and the availability of the final products for
shipping. The state variables of this part of the model are Preforms WIP and Presses WIP
and Finished Goods Inventory.

Current Policy and SC Instability

The set of parameters in Table 1 defines the current policy for this supply chain.

Table 1. Parameter values for the current policy

Parameter Value Unit
Desired Days Supply of Parts Inventory 2 Weeks
Time to Correct Parts Inventory 1 Weeks
Preforms Cycle Time 3 Weeks
Presses Cycle Time 3 Weeks
Time to Correct Inventory 1 Weeks
Supplier Delivery Delay 2 Weeks
Time to Adjust Labor 1 Weeks
Labor Recruiting Delay 5 Weeks