A Discrete Model for Inventory Control and Disaster Planning

When there is a high-volume usage of a product which requires procurement through multisourcing, the question must be asked: ``How would the business respond to a loss (complete or temporary) of one or more of the sources providing the product?'' The answer to this question is largely dependent upon factors such as the following: a) the ability of other present sources to provide additional units beyond present deliveries, in conjunction with their current or potential tooling, test, and manpower capabilities; b) the response time of other sources to added demands; c) the extent and nature of the disaster to a particular source and its relative ability to recover; d) the amount of protection provided by present inventory levels. Simulation of a disaster at a key source or sources can give invaluable insight into these factors and serve as an aid to management in the development of sourcing strategy and the maintenance of protection inventory levels. A model has been developed which determines the impact of a disaster at any of the sources producing one or more key products. The model simulates the interaction of deliveries and requirements on inventory levels as deliveries are impacted by disaster. This model enables an accurate assessment of sourcing strategy and provides management with the ability to perform quick turn around ``what if'' studies to aid in future decisions.