Simulated operating concepts for WIOM implementation
Teter, Sean M.
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Naval Supply Systems Command Weapon Systems Support (NAVSUP WSS) serves as the Navy’s inventory control point, managing approximately 375,000 line items. Constrained by funding, NAVSUP WSS uses the Wholesale Inventory Optimization Model (WIOM), a mixed-integer linear program developed by Naval Postgraduate School faculty, to maximize customer service. Since demand distributions for different parts change over time, NAVSUP WSS updates the inputs to WIOM and reruns it quarterly. However, large changes to the solution create an administrative burden. To deal with this problem, referred to as churn, WIOM has a persistence parameter that can discourage change from one run to the next, but it is inherently at odds with customer service performance. This thesis presents a new model, the Comparative Optimized Results Simulation (CORS). Using CORS, the thesis explores the system’s performance under different settings of the persistence parameter and different periodicities of running WIOM. The thesis finds that periodicities greater than quarterly significantly degrade customer service. Additionally, the thesis finds that increasing the persistence parameter dramatically improves churn while only marginally degrading customer service.
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