Credibility assessment of simulation results
WSC '86 Proceedings of the 18th conference on Winter simulation
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Hazardous shelf-life items present complex and challenging managerial problems for both government and industry. We modeled the current and alternative stockage policies for Defense Logistics Agency hazardous shelf-life items with a validated stochastic simulation. We used current government regulations and cost estimates to track procuring, receiving, inspecting, holding and disposing costs. Demands and returns were generated by empirical distributions based on historical data. The results indicate that a direct delivery from vendor to customer policy with adjustments to reorder points and stockage objectives was the best alternative in terms of supply availability and total operating cost. When direct delivery was not possible, the next best alternative was to establish a minimum buy quantity with a conservative stockage objective and to place limits on the economic order quantity and returns.