1. Proceedings
  2. I3M
  3. 2019
  4. MAS
  5. 10.46354/i3m.2019.mas.014

Simulated operating concepts for wholesale inventory optimization at Naval Supply Systems Command

  • a Sean Teter  , 
  • b Emily Craparo  , 
  • c Javier Salmerón  
  •  
  • abc Operations Research Department, Naval Postgraduate School, Monterey, CA, U.S.A.
Cite as
Teter S., Craparo E., Salmerón J. (2019). Simulated operating concepts for wholesale inventory optimization at Naval Supply Systems Command. Proceedings of the 18th International Conference on Modelling and Applied Simulation (MAS 2019), pp. 101-108. DOI: https://doi.org/10.46354/i3m.2019.mas.014
 Download PDF

Abstract

Naval Supply Systems Command Weapon Systems Support (NAVSUP WSS) serves as the Navy’s inventory control point, managing approximately 375,000 line items. Constrained by funding, NAVSUP WSS uses the Wholesale Inventory Optimization Model (WIOM) to maximize customer service. Since demand distributions for different parts change over time, NAVSUP WSS reruns WIOM quarterly. However, large changes to the solution create an administrative burden. To deal with this problem, referred to as churn, WIOM has a persistence parameter that can discourage change from one run to the next, but it is inherently at odds with customer service performance. This research develops the Comparative Optimized Results Simulation to explore the system’s performance under different persistence settings and periodicities of running WIOM. The research finds that periodicities greater than quarterly significantly degrade customer service, and increasing the persistence parameter dramatically improves churn while only marginally degrading customer service.

References

  1. Bachman T, Williams P, Cheman K, Curtis J, Carrol R (2016) PNG: Effective Inventory Control for Items with Highly Variable Demand, Interfaces, Vol. 46, No. 1, January–February 2016, pp. 18–32.
  2. Ellis D, Cardillo J, Motter, M (2017) Information regarding NAVSUP WSS operations and WIOM
    implementation provided to author in person via personal communication during site visit to
    NAVSUP WSS, June 13–15.
  3. Köchel P and Nieländer U (2005) Simulation-based optimisation of multi-echelon inventory systems, International Journal of Production Economics, Vol. 93–94, pp. 505-513.
  4. Law A (2015) Simulation Modeling and Analysis, 5th ed. (McGraw-Hill Education, New York, NY)
  5. NAVSUP (2019) NAVSUP Enterprise. Accessed April 15, 2019,
    https://www.navsup.navy.mil/public/navsup/enterprise/.
  6. Roth G (2016) A simulation of alternative for wholesale inventory replenishment. Master’s thesis, Operations Research Department, Naval Postgraduate School, Monterey, CA.
    https://calhoun.nps.edu/handle/10945/48587.
  7. Salmeron J, Craparo E (2017) Wholesale Inventory Optimization Model. Naval Postgraduate School, Monterey, CA.
  8. Silver E, Pyke D, Peterson R (1998) Inventory Management and Production Planning and
    Scheduling, 3rd ed. (John Wiley and Sons, Hoboken, NJ).
  9. Tersine R (1994) Principles of Inventory and Materials Management, 4th ed. (PTR Prentice Hall, Upper Saddle River, NJ).
  10. Teter S (2018) Simulated operating concepts for WIOM implementation. Master’s thesis, Operations Research Department, Naval Postgraduate School, Monterey, CA. http://hdl.handle.net/10945/58269