Author(s): Şengül Coşkun

Doi: 10.7508/aiem.01.2025.01.10

This is an open access article distributed under the Creative Commons Attribution License CC BY 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

In today’s competitive business environment, the efficiency of production and inventory management processes plays a critical role. This study presents a simulation model developed to understand the impact of production uncertainty, downtime, and customer demand on inventory management. Using the Arena simulation software, the model analyzes the dynamic management of inventory levels, identifies bottlenecks in the production process, and proposes strategies to enhance operational efficiency. The study aims to investigate the effects of downtime, repair processes, and demand uncertainty in a system where production is carried out on a single machine. The simulations reveal the impact of dynamic inventory management on production efficiency. Various scenarios were tested to optimize the production process. The simulation results indicate that machine failures directly affect customer losses, and reducing repair time improves delivery time by 86%. However, while increasing production capacity reduces customer losses by 85%, it also extends production times. From an inventory management perspective, low stock levels lead to higher customer losses, and merely increasing safety stock is insufficient to prevent these losses. The contribution of this study to the literature lies in offering an innovative approach to production and inventory management by utilizing dynamic simulation models to analyze uncertainty scenarios that are difficult to address with traditional methods. By presenting a simulation model that represents uncertainties in the production system, this study contributes to businesses’ strategic decision-making processes. The model provides practical and applicable strategies for companies seeking to optimize their production and inventory management decisions.

KEYWORDS:
Arena Simulation, Production Management,Inventory System, Lost Customers, Downtime