Globally, firms often test new ideas before making complex business decisions. Simulation modeling refers to the process of developing notions or model and analysing their performance in the real world (White and Ingalls 12).
In business, the scrutiny technique allows companies and stakeholders to manipulate specific parameters such as price and revenue, to determine areas of perfection in operation (Duggan). This paper discusses a situation that would be appropriately modeled using simulation and its appropriateness.
Companies often rely on their supply chain for sustainability in the global market. Technological advancements have contributed immensely to the competitiveness and dynamic nature of the marketplace (Abo-Hamad and Alisha 2).
Effective Management of the supply chain network can be challenging due to the high uncertainty of supply, demand, numerous decisions variables and constraints among others (Abo-Hamad and Alisha 2). Henceforth, modeling using simulation can be significant in the situation to design the supply chain and evaluate the supply chain management before implementation of the system, to determine the profitable strategies and decisions to undertake.
Modeling using simulation would be appropriate since stakeholders often have a difficult time managing their supply chains due to fluctuations of the market prices and competition. Simulation can help the stakeholders to determine; location of facilities, distribution channels, locations of stocks, selection of suppliers and partners, the capacity of stock and booking level, and the loyalty of their consumers, in a supply chain network. Consequently, the replication acts as contributing factor to the profitability of majority of the firms without much risk.
Works Cited
Abo-Hamad, Waleed and Amr Alisha. "Simulation–Optimisation Methods in Supply Chain Applications: A Review." Irish Journal of Management (2011): 1-31. Document.
Duggan, Tara. Application of simulation in business. 2018. Web. 18 8 2018. .
White, Preston and Ricki G. Ingalls. "Introduction to Simulation." Proceedings of the 2009 Winter Simulation Conference (2009): 12-23. Document.
