This paper presents a case study of production/inventory management in a mylar capacitor manufacturer. After a detailed analysis of the production/inventory system, the key decision variables along with the major environmental factors and their inter-relationships are identified. A computer simulation model of the system is then developed and simulation runs are carried out on a micro-computer to help determine the most appropriate setting of the decision variables subject to the stochastic effect of the environmental factors. This study illustrates the potential of combining simulation techniques with low cost computing facilities to create a powerful tool for effective management decision making.
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