To the Simulation Expert,

We are seeking your expertise in designing and optimizing a critical component of our new supply chain operation. As part of our regional expansion strategy, we plan to establish a logistics warehouse that will serve as the hub for inventory storage and distribution across the region. Given the complexities of this endeavor, we require a detailed simulation analysis to inform our decision-making.

Business Context

Our new warehouse will handle both inbound and outbound logistics operations. Inventory will arrive at the facility from a nearby port via container-carrying lorries, while our fleet of trucks will handle last-mile distribution to regional customers. The demand for our products exhibits clear seasonal patterns, with fluctuations that we need to account for in our operational planning.

The facility will need to balance capital expenditure (CAPEX) with performance to ensure reliable service to our customers while keeping initial investment under control. We are particularly interested in exploring trade-offs between CAPEX and system performance, measured through metrics such as order fulfillment rates and throughput.

Problem Statement

We need a simulation model to evaluate various configurations of the warehouse and its operations. Specifically, the model should account for:

Inbound Operations:

• Pallets arriving at the warehouse

Warehouse Design:

• Total storage capacity.
• Forklift trucks available.

Outbound Operations:

• Fleet size in terms of number of trucks.
• Loading bays.
  

Cost Analysis:

• Total cost of ownership accounting for initial CAPEX outlay and ongoing OPEX costs.

Objectives and Deliverables

Our primary objective is to identify a Pareto frontier of configurations that balance total cost of ownership (TCO) and performance. Specifically, we would like to:

• Develop a set of scenarios that test different combinations of forklift truck fleet size, deliver truck fleet size and number of bays.
• Evaluate system performance based on throughput (deliveries per day).
• Generate insights into the optimal configurations that provide the best value for our initial investment.

The final deliverable should include:

1. A detailed simulation model with input flexibility to test various scenarios.
2. A report summarizing the results, including key insights into trade-offs between total cost and performance.
3. Recommendations for the most cost-effective solution.

We look forward to your insights and solutions to help us design a supply chain system that supports both operational excellence and financial sustainability.

Thank you for your expertise.

Sincerely,

Rachel Summers

Global Nexus Logistics