CASE BACKGROUND
Mahakal Logistics is a 3PL service provider for a lot of companies in the food, chemical, and
pharmaceutical industry in North India. The company sees a huge potential for growth and wants to
expand the operations in South India. In this regard, the company assigns the task of analysing the
potential for expanding the business across customers in a specified geography before actually planning
operations and implementation.
Objective:
As the Chief Analyst in the Supply Chain department, you are tasked with creating a Simulation Model to
explain how the customers in the market could be made to avail services from our company.
Scenario:
The company classifies users into three categories:
1. Potential Users – who are the target population i.e., the customers who are more likely to avail the
service.
2. Users – who have already purchased the service.
3. Wants to Buy – this indicates an intermediate level of customers who have placed order(s) and is/are
waiting for receipt of goods
Parameters considered:
Since the company is an established player and has acquired the network of a few customers in South
through satisfaction of their North Indian partners, they are considering that they have 1% probability of
converting potential users to users through satisfaction.
Additionally, the management also feels that there is a 1% chance to influence potential users through
Word of Mouth (WOM) effect brought by the existing users of the 3PL service.
The company also knows the importance of delivering the goods on time as the food products are
perishable and chemicals/ pharma products need to be delivered on-time for application. Hence, lead
time and maximum waiting time for delivery are also considered. The Wants to buy cohorts discard the
present service requirement if the goods are not delivered on time.
Also, after the product service lifetime is over (i.e., product is consumed/ discarded), the users are
considered to become potential users who can avail service again.
STEPS TO CREATE THE SIMULATION MODEL
File New Model
Model Name “Logistics”
AnyLogic Workspace:
Projects and Palette
Projects – lists the projects opened (hierarchically within each project)
Palette – has the list of items grouped
Properties – displays the properties of selected item
Navigating through the model in the Projects view
Displays the model in tree structure
Top level displays the model and the level below shows different agent types
Run Configuration – tune model input and output
1. Creating Agent Population
Default agent type – Main
Agents – building blocks; represent real world objects
Switch to “Palette” tab
Open “Agent” palette
Drag the “Agent” from the “Agent” palette to the Main diagram
Go to “Projects” view and see the new Agent created
Consumer agent type – has the shape (person 2D) and variable “Satisfaction”
Main agent type – has population “consumers” of 1000 agents
On the Main diagram, select the image shape. In “Properties” Advanced enable “Draw agent with
offset to this position”
“Build” button to check for errors
“Run” button “Logistics/Simulation” and see the experiment run.
2. Defining Consumer behaviour
Statecharts
Used to describe event and time based behaviour of agents
Each agent can hold only one state at any point in time
They represent/ indicate the state of existence of agents at a given point in time
One agent may have several Statecharts that describe independent parts of agent’s behaviour
“Projects” view, open the “Consumer” (tab) diagram by double clicking
Navigate to “Consumer” agent tab by clicking
Open “Statechart” palette
Drag the “Statechart Entry Point” from the “Statechart” palette on to the “Consumer” diagram
Drag the “State” from the “Statechart” palette on to the graphical diagram and connect it to the
“Statechart Entry Point”
Select the “State” in the graphical editor and modify its “Properties”
“Ctrl + Space” or “Alt + Space” for code completion. It tells descriptions of the codes
Add another “State”
Draw a “Transition” from “PotentialUser” to “User” state to indicate how the target customers become
actual users by availing the service
Transition Triggers
Rate – implement a state change with a known rate
Timeout – state change after a time interval
Message – state change by receipt of messages from other agents
Click Model Name in “Projects” and change the “Model time units” to days in “Properties”
Choose this based on the steps in which the model needs to undergo changes
Run the Model
Adjusting Model execution speed
Pausing the Model and entering the required run length
3. Adding a chart to visualize the model output
Define function to count the agents in each state
Open “Main” and select “consumers” and go to “Statistics” in “Properties”
Item – agent being currently checked
inState – checks whether the specified state is active i.e., if it is the current state of an agent
PotentialUser – Name of the specified state of agent type “Consumer”
Adding a chart to visualize the statistics
Open “Main” diagram. “Analysis” palette “Time Stack Chart”. Adjust the size as required
Click the Chart and go to “Data” tab in “Properties”
Tune the Chart’s time scale
Displaying Model date near the axis
Run the Model. Place the Consumers anywhere such that there is no overlap when results are displayed
4. Adding Work of Mouth (WOM) effect
In “Projects”, open “Consumer” diagram by double-clicking
Add a “Parameter” to define a consumer’s average daily contacts. Open “Palette” view drag the
“Parameter” from the “Agent” palette on to the diagram
Adding “ContactRate” that defines the number of agents met by each other agent every day
Adding another “Parameter” “AdoptionFraction” that defines the influence of an agent on others. i.e.,
ability to convert potential users to users after communicating
Increase “User” state size to define an internal “Transition” named “contacts”.
For every meeting, the agent sends a message “Buy” to random agents. If the message is received by an
agent in “PotentialUser” state, then there is a chance of transition to “User” governed by
“AdoptionFraction” (Probability of transition).
Draw a “Transition” “WOM” from “PotentialUser” to “User”
Run the Model
5. Considering Product Lifetime and discards
Once a consumer discards the product, he is considered to become a “PotentialUser” again
Draw a “Transition” “Discard” from “User” to “PotentialUser”
Run the Model
6. Considering Delivery time (Effect of lead time)
Increase the space between the states to add a new “State” called “WantsToBuy”. This indicates that a
Potential customer has placed an order and is waiting for the purchase to be completed.
Add a “Transition” from “WantsToBuy” to “User” indicating the process of “Purchase”
Go to “Main”, click “consumers” and go to “Statistics” in “Properties”. Add statistics to count the number
of patients waiting to receive the purchase.
In “Main”, select the “Time Stack Chart” “Data” in “Properties” and add the statistic to be displayed in
the chart based on the counted agents in the “WantsToBuy” state
Make the count second in the chart as it is an intermediate “State”
Run the Model
7. Simulating Shelf Life/ Wastage/ Customer Impatience
In “Main”, add three parameters outside the display window (blue color) as we do not want the
“Parameters” to be displayed in the solution.
Beyond “MaxWaitingTime”, the “WantsToBuy” consumers change to “PotentialUser” because of many
reasons like delayed delivery, expiry, etc.
Edit the “Purchase” transition.
Timeout: uniform(main.MinDeliveryTime, main.MaxDeliveryTime)
This indicates lead time variability
Draw transition “CantWait” from “WantsToBuy” to “PotentialUser”
Timeout: triangularAV(main.MaxWaitingTime, 0.15)
This indicates that customers wait for the period mentioned in “MaxWaitingTime” with an accepted
variation in delivery time of 15 percent
Run the Model
CASE SCENARIOS FOR ASSIGNMENT SUBMISSION
Please pick the scenario (Appendix A) based on your group number for submission. Four products
mentioned in each scenario are the ones that your company is going to offer the 3PL service for. Each
student in a group needs to pick one among the four products and answer the following questions
(individually).
1. Rationale for choosing the product – scope of product in the market, revenue, etc.
2. Challenges faced
3. Modifications made to fit the service and infrastructure to serve the product. Please include
modifications in terms of vehicles, packaging, warehouse design, operational changes, etc. based on your
learnings in the course
4. Provide managerial implications on how more customers for the product could be attracted.
Please use as many concepts as possible to explain the questions.
You are welcome to add/ modify the simulation model by adding more parameters that you feel will
affect the 3PL service offering of your product.
SUBMISSIONS REQUIRED - INDIVIDUAL
1. PPT containing the answers to the above questions
2. Simulation Model (Simulation models are evaluated individually though the values are same for the
group)
APPENDIX A
Max Max
Word of Min Max Waiting Waiting Service
S.N Satisfact Mouth Delivery Delivery Time Time Lifetime Produc Produc Produc Produ
Scenario
o. ion (%) Effect Time Time (Unifor (Triang (months t1 t2 t3 ct 4
(%) (days) (days) m) ular) )
(days) (days)
Dairy
Low satisfaction with short delivery time for fast-moving Mango Antibio Sanitiz
1 8.12 2.8 4.82 17.43 14.72 13.37 9.05 Produc
consumer goods. Juice tics ers
ts
Moderate satisfaction with balanced delivery for Painkill Shamp Face Soft
2 19.06 5.63 4.68 16.46 12.75 13 9.85
healthcare products. ers oo Masks Drinks
Hand
High satisfaction with emphasis on faster delivery for Orange Paracet Vitami
3 14.91 6.33 3.79 19.45 13.23 12.73 5.14 Sanitiz
essential supplies. Juice amol ns
er
Tomato
Quick delivery but moderate word-of-mouth impact for Antisep Energy
4 12.37 1.42 4.77 18.49 14.27 13.23 9.55 Ketchu Soap
chemical products. tics Drinks
p
Longer delivery times but high satisfaction for food and Protein Antibio Hand Chocol
5 3.96 6.47 2.27 17.32 12.69 14.49 6.31
beverage products. Bars tics Wash ates
Balanced delivery with strong service lifetime for pharma Deterg Face Cold
6 3.96 2.53 2.59 16.25 12.23 13.21 8.69 Juices
products. ent Wash Syrup
Focus on short delivery time for hygiene and personal Fruit Painkill Disinfe
7 2.1 1.59 2.14 17.24 12.87 13.53 8.7 Cheese
care products. Jam ers ctant
Shavin
Moderate satisfaction and quick delivery for daily-use Cough Mouth
8 17.46 9.54 2.98 17.3 12.48 13.84 7.82 g Tea
healthcare items. Syrup wash
Cream
Hand
Slightly slower delivery but strong satisfaction for food Peanut Bandag
9 12.42 9.69 3.17 18.92 14.79 13.28 3.81 Sanitiz Cereals
products. Butter es
ers
Efficient delivery with reasonable word-of-mouth for Condi Vitami Face
10 14.45 8.28 2.81 18.55 14.42 14.64 10.52 Coffee
chemical industries. ments ns Masks
Cold
Balanced satisfaction and delivery time for healthcare and Energy Hand Ice
11 1.39 3.74 4.49 19.55 13.9 14.59 5.89 Medici
chemical products. Bars Wash Cream
ne
Quick turnover with high satisfaction in food and Soft Bandag
12 19.43 1.88 3.07 17.89 14.61 13.06 4.68 Soap Butter
beverages. Drinks es
High satisfaction with long-term delivery for pharma and Cold Hand
13 16.82 7.16 2.84 16.48 14.41 13.5 3.37 Honey Milk
food industries. Syrup Wash
Short delivery but strong word-of-mouth for healthcare Chocol Face Bandag
14 5.03 4.96 3.63 18.85 12.56 13.16 8.32 Juice
consumables. ate Masks es
Moderate satisfaction with balanced delivery for daily Protein Antibio Mouth
15 4.45 2.1 2.42 19.04 14.68 13.13 9.1 Yogurt
personal care items. Powder tics wash
Fruit Painkill Disinfe Smoot
16 Quick response time for health and wellness products. 4.48 5.46 4.41 18.25 13.62 12.41 3.15
Juice ers ctant hies
Higher satisfaction with slightly extended delivery time Condi Cough Mouth
17 6.78 1.31 2.22 19.08 14.42 13.67 7.61 Pasta
for beverages. ments Syrup wash
18 Balanced product delivery with strong lifetime for 10.97 9.18 4.96 17.98 14.69 13.5 5.04 Milk Antisep Hand Cookie
consumer goods. Powder tics Sanitiz s
er
Focus on shorter delivery and higher satisfaction for Vitami Antibio Cold
19 9.21 3.33 4.32 18.09 12.95 12.48 8.81 Soda
healthcare items. nC tics Syrup
Quick delivery for time-sensitive healthcare products with Lemon Painkill Face
20 6.53 6.96 2.6 17.71 12.33 13.12 4.57 Nuts
moderate satisfaction. ade ers Wash
Hand
Balanced delivery and satisfaction for dairy and health Paracet Biscuit
21 12.63 3.81 2.02 16.1 12.68 14.36 9.22 Tea Sanitiz
beverages. amol s
er
Moderate satisfaction with longer delivery times for Vitami Bandag Cracke
22 3.65 5.68 4.45 16.43 13.28 13.04 6.48 Yogurt
healthcare goods. ns es rs
Cold
Focus on short turnaround times for food products with Face
23 6.55 5.92 4.12 16.13 14.45 12.81 11.43 Butter Medici Sauce
strong word-of-mouth. Masks
ne
Quick delivery time and moderate satisfaction for Antibio Energy
24 7.96 2.66 4.19 18.55 14.58 13.48 4.24 Cheese Soap
chemical and healthcare products. tics Drinks
High satisfaction with moderate word-of-mouth for food Chocol Cough Mouth
25 9.67 9.73 4.31 17.26 12.02 14.75 6.07 Candy
and pharmaceutical goods. ates Syrup wash
Strong satisfaction with balanced delivery for healthcare Painkill Disinfe
26 15.92 7.98 2.22 18.03 13.53 13.04 4.02 Milk Snacks
and hygiene items. ers ctant
