Enhancing the performance of a two-echelon inventory system with emergency supply flexibility using pipeline knowledge

We develop a simulation model that allows us to investigate the performance measures of a two-echelon inventory system with emergency resupply flexibility. We introduce an additional level of intelligence based on pipeline knowledge into the inventory model decision logic and show that this approach can lead to additional cost savings. We use guided local search applied on the simulation model to calculate the optimal stock levels and investigate whether these are influenced by the introduction of pipeline knowledge into the model. This approach illustrates the additional flexibility offered by a simulation approach in comparison with an analytical approach.