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.
