Objective: This exercise will introduce the fundamental principles of stock and flow dynamics in a supply chain. You will learn how to model a simple inventory system using two essential tools: Microsoft Excel for discrete, day-by-day simulation, and Insight Maker for continuous, visual system dynamics modeling. By the end of this exercise, you will understand how inventory levels change in response to supply and demand.

Scenario: You are the manager of the campus bookstore. The most popular textbook for a large first-year course has just arrived. Your task is to model the inventory of this textbook over the next 10 days to understand if your ordering policy is effective.

Key Data:

·         Initial Inventory: You begin with 1,000 textbooks in stock.

·         Supply: Your supplier delivers a constant 100 textbooks per day.

·         Sales: You sell a constant 80 textbooks per day.

1.1.         Create the Stock:

·         Go to insightmaker.com and click "Create New Insight".

·         From the "Primitives" menu, click "Stock". Place it on the canvas.

·         Name it Ending Inventory. This represents the inventory level at any given time.

·         In the properties panel on the right, set the "Initial Value" to 1000, matching our Initial Inventory parameter.

1.2.         Create the Inflow and Outflow:

·         Add a "Flow" pointing into the stock. Name it Supply/day.

·         Add another "Flow" pointing away from the stock. Name it Sales/day.

1.3.         Define the Flow Equations:

·         For this simple model, we will set the rates directly in the flows.

·         Select the Supply/day flow. In its properties, set the "Flow rate" to 100.

·         Select the Sales/day flow. Set its "Flow rate" to 80.