Hierarchical model to optimize performance in logistics policies: multi attribute analysis

The purpose of this paper is to propose a new application methodology to evaluate the best inventory strategy through the use of an integrated approach based on Analytic Hierarchy Process (AHP) and Simulation. Our specific aim is to applying an integrated multicriteria decision making model based on AHP and simulation to improve inventory management and reverse logistics management in order to reduce total supply chain costs. The application methodology, which is loosely based on Simulation approach, incorporates the AHP approach to delineate and rank the relative importance weight of expressed judgments to analyze global supply chain decisions. Different inventory control policies to be used in a supply chain with products return are presented. Definitely AHP and simulation model is used in order to investigate and compare the behavior of the inventory control policies in terms of total supply chain costs.