Beer Game developed by Slaon School of Management didn¡¦t add price variable into the game. It¡¦s reasons were : (1) As long as there is time delay, it will induce dynamic complexity. (2) If there is price variable, maybe we can¡¦t observe patterns and structure. In the research, we try to add price variable into Beer Game to verify the statement made by Slaon School of Management. Besides, we can explore whether it will influence players¡¦ decisions or not. The learning effects are also we concern about. After a few experiment, althought bullwhip effect is still existing, it¡¦s not much apparent then before. Besides, players are affected by price variables. From discussions after the game, we can find players lack systems thinking, they have misperceptions of feedback and get used to put blame on others. Those learning effects are the same as traditional beer game induced. However, beer game with price variable can conclude many behaviors made by players. To contrast with the panic buying and stock conditions, such as respirators panic buying in 2003, toilet paper price rise caused by pulp cost increased in 2004, players can simulate the real world throuth playing the game. They can reflect and learn, then bring this experience into real life.

Due to the progress of display manufacturing technology, TFT-LCD (Thin Film Transistor-Liquid Crystal Display) has been widely put in use gradually such as monitor¡Blaptop and LCD TV. We also can find TFT-LCD that has already entered the market of the consuming products from IT (Information Technology). And the competition of the panel industry, besides manufacturing technologies, the dynamic demands of upstream, downstream and consumers are related that will effect the performance of panel markers or whole supply chain. Which is called bullwhip effect. Especially, the configuration is vertical partition in Taiwan and the buffwhip effect would be more significant than other countries. This paper discusses the key factors of bullwhip effect and them constructs the system dynamic models to explore the difference. Finally, we will analyze the TFT-LCD members of Taiwan to figure out the decision rules to decrease bullwhip effect.

This thesis intended to increase the understanding of bullwhip effect in electrical appliance industry in the Chinese market. In the supply chain management, the bullwhip effect is a phenomenon can never be ignored. The bullwhip effect has being defined as information distortion when orders move form downstream enterprises to the supplier (Lee et al 1997b). The distortion information was amplified step by step, and finally propagates to the enterprise marketing, logistics, manufacture and other fields. The existence of the bullwhip effect weakens the ability to add value and competitiveness of the supply chain. Hence, enterprises must collaborate and jointly mitigate the bullwhip effect to reach groups coexist. This work focus on the electrical appliance industry in China, and based on the successful experience of the case company, Haier Group, to formulate recommendations. Firstly, this research analysis the four causes of the bullwhip effect: demand forecast, price fluctuations, order quantity and short game (Lee et al 1997a). After analyze these causes, this study begins to identify the impacts which the bullwhip effect bring to the members of supply chains. The most obvious impacts can be defined as inaccurate forecasting, inadequate customer service and high inventory cost. Next, the paper evaluate the measures of Haier implement to dampen the bullwhip effect. Information sharing, the key point to solve the problem has been use in Haier. In addition to this, the Just in Time (JIT) strategy which include JIT purchase, JIT delivery and JIT distribution is another important measure for Haier to achieve the goal of mitigate the bullwhip effect.  Overall Every Control and Clear (OEC) management was created by Haier Group and aims to improve the supply chain management, is another countermeasure to deal with the bullwhip effect. Besides, the inventory management also have an important role in gaining the control of bullwhip effect. In summary, the successful experience on dampening the bullwhip effect of Haier can shine a light for electrical appliance industry in China on solving the similar problem. Information sharing is always the key point to mitigate the bullwhip effect, and related instructions should build to remove the barriers of sharing information.

Dagens komplexa försörjningskedjor försvårar informationsdelning mellan företag där främst kommunikationen brister. Inom livsmedelsbranschens färskvaruhantering kan detta få finansiella, sociala och miljömässiga konsekvenser. Teoretiskt har det visats att livsmedelsbranschen präglas av osäker efterfrågan och svårigheter i lagerhantering. Den komplexa interaktionen mellan efterfrågan, utbud, kapacitet och lager gör det svårt för företag att hitta en balans där en avvägning ofta måste göras mellan att ha ett överskott eller brist. Ett överskott innebär nöjda kunder men kan även innebär finansiella förluster och negativ påverkan på miljön genom matsvinn, medan en brist kan innebära förlorad försäljning och missnöjda kunder. Att efterfrågan är svår att förutspå samt kommuniceras felaktigt genom försörjningskedjan kan leda till att en bullwhip-effekt skapas vilket har negativa konsekvenser för samtliga aktörer i hela försörjningskedjan. Denna studie har således avsett besvara forskningsfrågan: Hur kan användningen av blockchain mildra bullwhip-effekten för färskvaror inom livsmedelsbranschen?  Denna studie avser besvara dess syfte genom en kvalitativ forskningsmetod. Detta eftersom forskarna strävat att nå en djupare förståelse för problemområdet. För att skapa en uppfattning om hur bullwhip-effekten uppstår inom livsmedelsbranschens försörjningskedjor har teori kopplat till bullwhip-effekten och dess orsaker presenterats. För att vidare förtydliga de problem bullwhip skapar har även teori kring dess konsekvenser redogjorts för.  Studien använder semi-strukturerade intervjuer där respondenterna verkar som producenter och återförsäljare i olika försörjningskedjor. De aktörer som intervjuats beskrev att de upplever diverse delar av problematiken bullwhip-effekten skapar, samt visade på att de själva, eller andra i deras försörjningskedja, bidrar till en risk för uppkomst av bullwhip. Vidare har intervjuerna visat att aktörer efterfrågar mer informationsdelning, där de framställt för- och nackdelar med detta. Nackdelarna som föreslogs av respondenterna ansågs kunna bemötas av studiens föreslagna blockchain-teknik.  Studiens resultat visar att osäker efterfrågan samt en bristande kommunikation upplevs inom livsmedelsföretags försörjningskedjor vilket kan orsaka en bullwhip-effekt som blockchain-tekniken potentiellt kan mildra. Detta genom dess transparens, säkerhet och effektivitet i informationsutbyte. Den form av blockchain som anses lämpa sig bäst för ändamålet har varit privat blockchain.

The bullwhip effect is defined as an upstream amplification of demand variability and has received interest within multinational companies for decades. As early as in the 1950’s, Forrester (1958) discussed what is today known as the bullwhip effect, which has a negative impact on the customer service, costs, and inventory investment in a supply chain (Lee et al., 1997). Even though the bullwhip effect has been noticed in various industries, the consequences, in form of decreased availability and increased costs the further up the supply chain the bullwhip goes, still remain. The employees at Volvo Group Service Market Logistics suspect that their supply chain has been affected by the bullwhip effect and want to know if it is correct and subsequently know why it has occurred. Therefore, this master’s thesis highlights the root causes of the bullwhip effect and presents strategies to mitigate it. To understand how the bullwhip effect affected the Volvo Group Service Market Logistics’ supply chain, the purpose was formulated as follow: The purpose of this study is to identify events in the Volvo Group Service Market Logistics’ supply chain where the bullwhip effect has occurred, its root causes, and how to reduce or eliminate the bullwhip effects.  The studied flow was from the Central Distribution Center (CDC) in Ghent, to the Regional Distribution Center (RDC) in Brazil, to the Dealers associated to the RDC in Brazil, and the customers. Data was collected from each node and events were studied to find bullwhip events. After sorting out the part numbers that passed the criteria for bullwhip events, the amount of data had to be reduced even more. A couple of different conditions were applied which resulted in four suitable bullwhip events. Thereafter, the authors conducted interviews with Logistics Managers at each node of the supply chain to find the root causes of the bullwhip effect in each studied event.  Among the several found root causes, lack of information transparency was the most frequent occurring root cause, found in three out of four studied bullwhip events. Insufficient communication and lack of information sharing cause bullwhip effects, and the authors found that improved communication both between and within the nodes will contribute to better planning, and consequently avoided bullwhip effects. Other root causes found were issues with the ordering system, lack of learning and experience, neglected lead times, fear of empty stock, price fluctuations, and phase-out of the spare part.  To reduce or eliminate the bullwhip effect, the focus was on mitigating the root causes since the root causes create opportunities for the bullwhip effect to occur. Four suggestions were given with suitable mitigation strategies found in the literature, where the four suggestions were sales campaigns, prepare for boosts, keep track of manually placed orders, and ordering system and Logistics Manager behavioural issues. The suggestions could then be connected to the different found root causes. The stated suggestions and mitigation strategies focused on mitigating the root causes in a long-term perspective and consequently the bullwhip effect itself.

Konsumentbeteende påverkas av olika faktorer, oro för kriser är något som kan förändra konsumentbeteendet och ha en stor påverkan på livsmedelskedjan. Under covid-19 syntes dess förändringar tydligt då rädsla och oro fick människor att bunkra. Liknande beteenden märktes även under början av kriget mellan Ryssland och Ukraina. Det har märkts av i form av tomma butikshyllor och att vissa butiker haft problem med beställningar. I nuläget har inte kriget stor påverkan på Sveriges försörjningskedja men det är svårt att bedöma hur det kommer se ut längre fram. På grund av den ökade efterfrågan leder det till variationer i beställningar som ökar längre bak i kedjan, detta fenomen kallas för bullwhip-effekten och startar hos konsumenter. Syftet med denna studie är att undersöka effekter i försörjningskedjan på grund av ändrat konsumentbeteende i en kris. För att uppfylla syftet och svara på frågeställningarna valdes ett kvantitativt förhållningssätt. Vi valde att göra en enkätundersökning för att få en stor representation av befolkningen. Enkäten syftar till att ge en uppfattning om konsumenters val och hur kriget och covid-19 påverkat deras konsumentbeteende och se exempelvis om de köper mer av vissa livsmedel eller bygger lager för att få en uppfattning om hur det påverkar försörjningskedjan.Slutsatsen blev att konsumentbeteendet från covid-19 inte har en stor påverkan på försörjningskedjan idag. Pandemin visade hur viktigt det är att livsmedelskedjan är flexibel och bör resultera i mer kontroll av lagerhållning och delning av information för att mildra bullwhip-effekten. En del respondenter uttryckte känslor av stress när de såg tomma hyllor i livsmedelsbutikerna sedan kriget i Ukraina började. Respondenterna visade också sig mer påverkade från sociala medier än vänner och familj. Trots antagande att de ej känt sig påverkade av kriget har ca 40% köpt extra av framför alltkonserver. Studien påvisade att många respondenter är oroliga för att framtida kriser kommer påverka försörjningskedjan. Om en ny kris skulle uppstå kommer vi förmodligen se liknande konsumentbeteende som i de två föregående kriserna. Detta resulterar i fortsatta störningar i kedjan och bullwhip-effekten. / Consumer behavior is affected by various factors, concern about crises is something that can change consumer behavior and have a major impact on the food chain. During covid19, the changes were seen clearly when fear and anxiety made people start hoarding food. Similar behaviors were also noticed during the beginning of the war between Russia and Ukraine. It has been noticed in the form of empty store shelves and that some stores have had problems with orders. At present, the war does not have a major impact on Sweden's supply chain, but it is difficult to assess what it will look like in the future. Due to the increased demand, it leads to variations in orders that increase further back in the chain, this phenomenon is called the bullwhip-effect and it starts with the consumers. The purpose of this study is to investigate effects in the supply chain due to changes in consumer behavior in a crisis. In order to fulfill the purpose and answer the questions, a quantitative approach was chosen. We chose to do a survey to get a large representation of the population. The survey aims to provide an idea of consumers choices and how the war and covid-19 affected their consumer behavior and see whether they buy more of certain foods or perhaps stockpile, to get an idea of how it affects the supply chain.The conclusion was that consumer behavior from covid-19 does not have a major impact on the supply chain today. The pandemic showed how important it is for the food chain to be flexible and should result in more control over inventory and information sharing to mitigate the bullwhip effect. Some respondents expressed feelings of stress when they saw empty shelves in grocery stores since the war in Ukraine began. The respondents also proved to be more influenced by social media than friends and family. Despite assuming they did not feel affected by the war, about 40% bought extra food, especially canned goods. The study showed that many respondents are worried that future crises will affect the supply chain. Should a new crisis arise, we will probably see similar consumer behavior as in the two previous crises. This results in continued chain disruptions and the bullwhip effect.

O foco dessa dissertação está na gestão de estoques em sistemas multicamadas. O modelo de simulação construído considera o desempenho histórico de uma cadeia de distribuição de medicamentos versus a política de gestão proposta. Os objetivos principais do trabalho são: a avaliação quantitativa da política de cálculo de necessidades aplicada na gestão de sistemas multicamadas, a verificação da importância da cooperação entre os elos da cadeia de distribuição para gestão do fluxo de materiais e o estudo das curvas que representam o dilema ‘nível de serviço’ versus ‘custo total da cadeia’. O modelo considera o fluxo de materiais a partir do estoque em processo do laboratório até a venda para as farmácias, que pode ser aproximada pela demanda dos medicamentos visto que os estoques das farmácias são relativamente pequenos e constantes ao longo do tempo. A modelagem de custos leva em conta o custo de estoque do laboratório e dos distribuidores, o custo de pedido dos distribuidores, o custo de transporte, o custo de entrega com atraso do laboratório e o custo de venda perdida dos distribuidores. Especificamente, são considerados cenários com e sem o compartilhamento de informações entre as empresas da cadeia. Consideram-se também cenários com e sem sazonalidade na demanda. Inicialmente, cada cenário simulado é preparado com a definição do ‘período transitório da simulação’, ‘horizonte de simulação’ e ‘número de réplicas’ necessárias. Depois disso, é feito o delineamento de experimentos para identificar quais variáveis de decisão têm efeito significativo sobre o custo total da cadeia. Finalmente, é feita uma busca da parametrização de cada um dos cenários que apresente o melhor custo total da cadeia. Os resultados da simulação mostraram que as práticas atualmente empregadas na gestão dos estoques das empresas podem ter seu desempenho melhorado com a utilização da política simulada na pesquisa. Os cenários nos quais se considerou o compartilhamento de informações tiveram desempenhos semelhantes aos sem esse compartilhamento. Dessa forma, para a política simulada, conclui-se que o valor do compartilhamento de informações foi relativamente pequeno. Nas simulações pode-se verificar a melhoria simultânea do nível de serviço e do nível de estoques da cadeia. Isso mostra que a política simulada mudou o dilema (trade-off) que interliga antagonicamente essas duas características de desempenho do sistema. / This dissertation focuses on the inventory management for multi-echelon systems. The simulation model proposes a new inventory management policy and compares it to the historical performance of a medicine supply chain. The main objectives of this research are: the quantitative analysis of the method used for the calculation of material requirements in multi-echelon systems; the verification of the importance of the cooperation between the components of the supply chain to the material flow management; and the analysis of the curves which represent the trade-off between ‘service level’ and ‘total cost’. The model takes into account the material flow from the laboratory’s ‘work in process’ up to the sales to the drugstores, which can be approximated by the demand of the final consumer, since the inventory kept by drugstores is relatively small and constant in time. The costs are calculated considering: the laboratory’s and distributors’ inventory costs, the cost of orders from the distributors, the transportation cost, the laboratory’s cost of late delivery and the distributors’ cost of lost sales. Scenarios with and without the sharing of information between the components of the supply chain were both considered. The same is true for scenarios with and without seasonality in the demand. Initially, each scenario was prepared with the definition of the ‘warm-up’ period, the simulation horizon and the amount of required replications. Secondly, the design of experiments (DOE) was done in order to determine which decision variables have influence on the supply chain total cost. Finally, each scenario was tested with many different parameters in order to find the lowest cost for the supply chain. The simulation results have showed that the procedures currently applied for the inventory management can have their performance improved by the use of the policy proposed in this research. The results for the scenarios with the sharing of information were similar to the ones for the scenarios without the sharing. For that reason, we can conclude that, for the proposed inventory management policy, the value of the sharing of information through the supply chain was relatively small. In the simulations, both the ‘service level’ and the ‘total cost’ have improved. In this manner, it can be said that the new policy has improved this trade-off.

Background: An organization's ability to control bound material can be the difference between success or failure. Organizations that effectively work with supply chain management has strengthened their positions and increase their competitive edge on the global market. Organizations is the pharmaceutical industry has a major social responsibility by ensuring a continuous flow of medicines as well as pharmaceutical equipment. The industry is controlled by the strict regulations. The stringent security requirements for delivery reliability and delivery precision combined with extensive production regulations have resulted in these organizations having difficulty in maintaining even inventory levels.   Purpose: The study aims to investigating the correlation between high level of safety requirements in the pharmaceutical industry and high inventory levels with the help of a case study. The study wants to investigate consequences of such connection as well investigate potential solution in which organizations can reduce their inventory levels without jeopardizing the delivery precision and delivery safety of pharmaceutical organizations.   A case study has been conducted at the pharmaceutical company Fresenius Kabi who is a global market leader in the production of intravenous nutritional solutions.   Finding: Findings of the study indicates that safety requirements controlling the pharmaceutical industry have a major impact on the organization's production planning and storage. The consequences of the high security requirements results in in uneven production patterns and tied capital in high inventory levels. The consequences also indicated on a Bullwhip-effect. Lean management enables organizations in the pharmaceutical industry to establish even production patterns and reduce their inventory levels.   The study presents a new factor that prevents organizations in the pharmaceutical industry to reduce the number of articles. The new factor has a strong link to why organizations in the pharmaceutical industry have high inventory levels. / Bakgrund: Hantering av lager och uppbundet material kan vara avgörande för en organisations framgång eller misslyckande. En ökad globalisering av dagens marknad har lett till att organisationer som effektivt arbetar med supply chain management stärker sina positioner och ökar sina konkurrensfördelar. En bransch på den globala marknaden som verkar under håra regleringar är läkemedelsbranschen. Branchen har ett stort samhällsansvar genom att säkerställa ett kontinuerligt flöde av läkemedel samt läkemedelsutrustning. De hårda säkerhetskraven på leveranssäkerhet och leveransprecision i kombination med omfattande produktionsregleringar har resulterat i att dessa organisationer har svårt att upprätthålla jämna lagernivåer. Syfte: Med hjälp av en fallstudie vill studien undersöka hur sambandet mellan höga säkerhetskrav och höga lagernivåer inom läkemedelsbranschen ser ut. Studien vill undersöka hur sambandet påverkar organisationer inom läkemedelsbranschen samt analysera hur man medhjälp av olika åtgärder kan minska lagernivåer utan att äventyra organisationernas leveransprecision och leveranssäkerhet. Fallstudien är baserad på läkemedelsorganisationen Fresenius Kabi. Fresenius Kabi är en global aktör som är marknadsledande inom produktion av intravenösa näringslösningar. Studien har undersökt produkten smofkabvien som produceras i Uppsala i syfte till att besvara studiens frågeställning. Med hjälp av intervjuer och insamlad sekundärdata besvaras studiens syfte. Slutsats: Studienkonstaterar att säkerhetskraven som reglerar läkemedelsbranschen har en stor inverkan på organisationens produktionsplanering och lagerhållning. Resultatet av de höga säkerhetskraven resulterar i ojämna beställning-och produktionsmönster vilket resulterar i hög kapitalbindning samt indikerar på en potentiell Bullwhip-effekt inom försörjningskedjan. Med hjälp av Lean management, heijunka och just-in-time kan organisationer inom läkemedelsbranschen upprätta jämna produktion-och beställningsmönster samt reducera sina lagernivåer. Studien presenterar en ny faktor vilken förhindrar organisationer inom läkemedelsbranschen möjlighet att reducera antalet artiklar. Den nya faktorn har en stark koppling till varför organisationer inom läkemedelsbranschen höga lagernivåer.

Enligt Carlsson och Rönnqvist (2005) och Frayret et al. (2007) blir det allt viktigare att arbeta med supply chain management inom trävaruindustrin. En utmaning är att finna ett arbetssätt för att hantera variationen i kundens efterfrågan. Idag hanteras variationen oftast genom onödigt stor lagerhållning (Lee et al., 1997b; So och Zheng, 2003).                                                                                 Syftet med studien är att utreda påverkande faktorer som bidrar till en varierande efterfrågan inom trävaruindustrin samt föreslå hur uppkomsten av dessa kan undvikas. För att svara på syftet har tre frågeställningar tagits fram och en fallstudie genomfördes på ett hyvleri. Informationsinsamlingen har skett genom intervjuer av anställda från olika avdelningar samt litteraturstudier. Studien visar att det finns flera utmaningar när det är stor variation på efterfrågan såsom brist på tillgång till prognoser och kommunikationsbrist med kunder. Det medför att planeringen av råvaruåtgången försvåras och det leder till svårigheter att uppnå leveransprecision.   Slutsatsen visar att de påverkande faktorer som bidrar till en varierad efterfrågan är prisvariationer, orderstorlek och orderfrekvens. Prisvariationer kan undvikas genom ABC-indelning av produkterna utifrån produktefterfrågan. Prognoser underlättar uppskattning av efterfrågan men för ett fungerande prognosarbete krävs samsyn, nära relation samt god kommunikation mellan kund och leverantör. Problem med orderstorlek och orderfrekvens kan reduceras om kunden får avgöra orderstorleken utan att specifika krav måste uppfyllas. Slutsatsen visar även att faktorer såsom väderlek, trender, mode, helgdagar och rotavdragets eventuella försvinnande påverkar variationen i efterfrågan. / According to Carlsson & Rönnqvist (2005) and Frayret et al. (2007) supply chain management in the wood products industry is getting more important. One of the challenges is to find a way to deal with customer’s fluctuating demand. Traditional solution to handle fluctuating demand is large inventory (Lee et al., 1997b; So & Zheng, 2003), which causes often high inventory cost for effective supply chain management.   The aim of the study is to investigate factors that affect a fluctuating demand in the wood products industry and suggest how to reduce the fluctuating demand through related factors analysis in order to improve Demand-Supply chain management efficiency. For this pursose, a case study on a planing is conducted. To collect data, interviews with employees from different departments have been made along with literature studies. The study presents that there are many challenges for the fluctuation demand such as lack of forecasts and lack of communication with customers. This, in turn, will cause problems with planning of the raw material as well as difficulties to deliver the goods on time.   The conclusion shows that the factors affecting a fluctuating demand are price variations, the orders batch size and order frequency. Price variations can be improved by ABC classification of the products by product demand. Forecasts will make the estimation of demand easier, although, in order to use forecasts properly a joint vision, close relationships and good communication with customer and supplier is required. Problems regarding batch size and order frequency can be reduced if the customer is allowed to decide the batch size with no specific requirements. The study also shows that factors such as weather, trends, fashion, holidays and disappearance of ROT work affects the fluctuating demand.

O foco dessa dissertação está na gestão de estoques em sistemas multicamadas. O modelo de simulação construído considera o desempenho histórico de uma cadeia de distribuição de medicamentos versus a política de gestão proposta. Os objetivos principais do trabalho são: a avaliação quantitativa da política de cálculo de necessidades aplicada na gestão de sistemas multicamadas, a verificação da importância da cooperação entre os elos da cadeia de distribuição para gestão do fluxo de materiais e o estudo das curvas que representam o dilema ‘nível de serviço’ versus ‘custo total da cadeia’. O modelo considera o fluxo de materiais a partir do estoque em processo do laboratório até a venda para as farmácias, que pode ser aproximada pela demanda dos medicamentos visto que os estoques das farmácias são relativamente pequenos e constantes ao longo do tempo. A modelagem de custos leva em conta o custo de estoque do laboratório e dos distribuidores, o custo de pedido dos distribuidores, o custo de transporte, o custo de entrega com atraso do laboratório e o custo de venda perdida dos distribuidores. Especificamente, são considerados cenários com e sem o compartilhamento de informações entre as empresas da cadeia. Consideram-se também cenários com e sem sazonalidade na demanda. Inicialmente, cada cenário simulado é preparado com a definição do ‘período transitório da simulação’, ‘horizonte de simulação’ e ‘número de réplicas’ necessárias. Depois disso, é feito o delineamento de experimentos para identificar quais variáveis de decisão têm efeito significativo sobre o custo total da cadeia. Finalmente, é feita uma busca da parametrização de cada um dos cenários que apresente o melhor custo total da cadeia. Os resultados da simulação mostraram que as práticas atualmente empregadas na gestão dos estoques das empresas podem ter seu desempenho melhorado com a utilização da política simulada na pesquisa. Os cenários nos quais se considerou o compartilhamento de informações tiveram desempenhos semelhantes aos sem esse compartilhamento. Dessa forma, para a política simulada, conclui-se que o valor do compartilhamento de informações foi relativamente pequeno. Nas simulações pode-se verificar a melhoria simultânea do nível de serviço e do nível de estoques da cadeia. Isso mostra que a política simulada mudou o dilema (trade-off) que interliga antagonicamente essas duas características de desempenho do sistema. / This dissertation focuses on the inventory management for multi-echelon systems. The simulation model proposes a new inventory management policy and compares it to the historical performance of a medicine supply chain. The main objectives of this research are: the quantitative analysis of the method used for the calculation of material requirements in multi-echelon systems; the verification of the importance of the cooperation between the components of the supply chain to the material flow management; and the analysis of the curves which represent the trade-off between ‘service level’ and ‘total cost’. The model takes into account the material flow from the laboratory’s ‘work in process’ up to the sales to the drugstores, which can be approximated by the demand of the final consumer, since the inventory kept by drugstores is relatively small and constant in time. The costs are calculated considering: the laboratory’s and distributors’ inventory costs, the cost of orders from the distributors, the transportation cost, the laboratory’s cost of late delivery and the distributors’ cost of lost sales. Scenarios with and without the sharing of information between the components of the supply chain were both considered. The same is true for scenarios with and without seasonality in the demand. Initially, each scenario was prepared with the definition of the ‘warm-up’ period, the simulation horizon and the amount of required replications. Secondly, the design of experiments (DOE) was done in order to determine which decision variables have influence on the supply chain total cost. Finally, each scenario was tested with many different parameters in order to find the lowest cost for the supply chain. The simulation results have showed that the procedures currently applied for the inventory management can have their performance improved by the use of the policy proposed in this research. The results for the scenarios with the sharing of information were similar to the ones for the scenarios without the sharing. For that reason, we can conclude that, for the proposed inventory management policy, the value of the sharing of information through the supply chain was relatively small. In the simulations, both the ‘service level’ and the ‘total cost’ have improved. In this manner, it can be said that the new policy has improved this trade-off.