Simulating availability outlook for e-commerce business of personal computer sales

Abstract

For newly designed or transformed business processes, accurately predicting business performances such as costs and customer services before actual deployment is very important. We have successfully developed and used a simulation model for the IBM's Personal Computer Division by modeling multiple, discrete events such as customer order arrival, replenishment planning and availability data refresh, and uncertainty of demand forecast, order size and customer preference of product feature. Using the model we were able to predict dynamics of availability, ship dates and accuracy of ship date, and identified other opportunities for improvement. We have also studied how different inventory policies, supply planning policies and sourcing policies affect business performance metrics such as inventory and customer services.