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<p>Supply chain management requires balancing customer service levels and inventory costs to remain competitive. This study examines the optimization of a multi-echelon supply chain using a discrete-event simulation model integrated with the OptQuest optimization tool in Arena software. A real-world case from Saba Dimensional Stones Plc in Ethiopia was modeled to evaluate downstream supply chain performance. The optimized configuration resulted in a 16.2% increase in customer service levels, rising from 58.81 to 70.18%. Inventory costs decreased by about 28.8&#xa0;million Ethiopian Birr. The simulation approach effectively minimized lost sales and backorders while improving responsiveness across the network. Model construction and validation steps ensured realistic process representation, supporting credible decision-making insights. The study highlights the relevance of simulation optimization for supply chains in low-resource settings, where demand variability and operational constraints pose challenges. Beyond quantifying improvements in service and cost, the findings underscore the value of such tools for analyzing complex system interactions and testing alternative scenarios before implementation. The practical insights support managers in making informed choices to enhance service levels, reduce costs, and improve overall efficiency. Additionally, the research acknowledges limitations, such as reliance on available data and the need for skilled personnel to maintain simulation systems. The approach demonstrates that simulation-based optimization can serve as a robust planning and analysis tool for supply chains facing dynamic market conditions. These results encourage broader adoption of simulation modeling in supply chain strategy development to achieve cost efficiency, improved customer satisfaction, and long-term competitiveness.</p>

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Optimization of supply chain performance through simulation modeling: a discrete event simulation approach

  • 期刊论文

  • 发表日期：

    2025年10月25日

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  • Misgna Arefaine Gebreabzgi,
  • Kinfe Tsegay Beyene,
  • Alexander Ghebremedhin Aregawi

摘要

Supply chain management requires balancing customer service levels and inventory costs to remain competitive. This study examines the optimization of a multi-echelon supply chain using a discrete-event simulation model integrated with the OptQuest optimization tool in Arena software. A real-world case from Saba Dimensional Stones Plc in Ethiopia was modeled to evaluate downstream supply chain performance. The optimized configuration resulted in a 16.2% increase in customer service levels, rising from 58.81 to 70.18%. Inventory costs decreased by about 28.8 million Ethiopian Birr. The simulation approach effectively minimized lost sales and backorders while improving responsiveness across the network. Model construction and validation steps ensured realistic process representation, supporting credible decision-making insights. The study highlights the relevance of simulation optimization for supply chains in low-resource settings, where demand variability and operational constraints pose challenges. Beyond quantifying improvements in service and cost, the findings underscore the value of such tools for analyzing complex system interactions and testing alternative scenarios before implementation. The practical insights support managers in making informed choices to enhance service levels, reduce costs, and improve overall efficiency. Additionally, the research acknowledges limitations, such as reliance on available data and the need for skilled personnel to maintain simulation systems. The approach demonstrates that simulation-based optimization can serve as a robust planning and analysis tool for supply chains facing dynamic market conditions. These results encourage broader adoption of simulation modeling in supply chain strategy development to achieve cost efficiency, improved customer satisfaction, and long-term competitiveness.