The Simulation Code will be provided to you by your program facilitator / course teacher
Dairy Supply Chain Simulation
The simulation story: In the southern Indian state - Kerala, a dairy farm co-operative society operates through a supply chain distribution model. There are four echelons in the dairy supply chain - [1] The dairy processing plant that produces milk-based products by sourcing raw material (milk) from farmers, [2] The distribution hubs that are located in regional zones (districts) who procures products from the dairy plant and distributes to wholesalers based on demand, [3] The wholesalers who purchase products from distributors and supply to local community retailers and, [4] The retailers, at the downstream end of the supply chain who source products from wholesalers and sell to consumers in their locality. Each echelon has stores and logistical infrastructure for ordering, and storing products and incurs associated costs. You will be representing an echelon in the supply chain. Your objectives are to: [1] Minimize the overall supply chain costs. This is the total cost incurred by your 4 member team over a time horizon, and [2] Minimize the supply chain cost at your echelon level.
Supply
Demand
Plant
Distributor
Wholesaler
Retailer
Consumer
Instructions to the Student:
1. The primary (and only) decision you have to make each week as an echelon is to order from your upstream supplier. The value of the order should be a whole number, and may be decided by you based on the demand, inventory you have at your echelon, and the associated costs.
2. You will be assigned one echelon by your instructor. It can be one of these: [1] Plant, [2] Distributor, [3] Wholesaler, or [4] Retailer.
3. Your primary objective is to minimize your supply chain's total cost, i.e. cumulative total cost of your 4-echelon supply chain. Your secondary objective is to minimize the total costs at your echelon level. The weekly costs incurred will be added up over the number of weeks in play.
4. The associated costs in the supply chain are: holding costs, stock-out costs, obsolescence costs (due to perishability of some products after a certain period from date of production). These associated costs per unit for each SKU will be intimated to you by your instructor. Please be sure to know about these costs before the start of the simulation.
5. Your simulation will usually be with 1 SKU (Cheese). However, the complexity of the supply chain may change if other SKUs (such as butter, paneer, ghee, yogurt or milk) are demanded by the consumer. Your instructor will notify you in advance if there are any changes in the complexity of supply chain.
6. The lead time at each echelon is 1 week (default value) for all SKUs . This means that if you order something from your upstream echelon, it will be delivered to you next week provided it is available. However, the lead time can vary (eg. 1 week, 2 week etc.) based on changes in business environment. Such changes if any, will be notified to you by your instructor during the course of the simulation.
7. You are not supposed to communicate to other players using any other means during the course of the simulation. This can amount to collusion, and your instructor may enforce penalty costs to your echelon or/and supply chain in such cases.
8. You may switch between the tabs (briefing, play sim, and results) during the course of the simulation to refer to the guidelines, make orders for ongoing week, and see your echelon level results (costs) for any week that has been played, or to keep track of the cumulative costs.
9. After going through the instructions, you may click "PLAY SIM" tab to start the play. Keep an eye out for the beginning inventory you have, and the different supply chain costs associated as part of the play. Good Luck!