Application of Monte Carlo Simulation as a tool for capacity planning strategy in a multi-level global Supply Chain focused to reduce the bullwhip effect

Supply Chain Management efforts are continuously seeking for improvements to better manage inventory levels and fulfill customer orders in a cost effective manner. However, defining system capacity by reacting to sales orders levels and inventory availability may create a bullwhip effect along the supply chain. This review is dedicated to compare two different manufacturing capacity planning strategies in a multi-level global organization by applying the Monte Carlo Simulation as a tool in order to mitigate production variation and its impacts in the overall business.