An optimization of inventory model at seaports using a system dynamics approach

Abstract

Port operation and cargo handling process involves integrated activities which any delay or stoppage result in bottleneck in port process. This in turn leads to a dramatic escalation in ship and cargo dwell times at anchorage, seaport terminals or exit gates. Increasing cargo dwell time not only depreciate port's equipment but also decrease port efficiency dramatically. The objective of this paper is to develop a modeling approach using the concept of System Dynamics (SD) to simulate variables affecting inventory optimization at Emam Khomeani seaports. To find proper actions by which seaports can optimize the inventory, dynamic of various variables such as dwell time, the number of human resources and equipment simulated during 2006 to 2031. The overall results show that warehouse traffic is highly sensitive to cargo dwell time, while this is less for the quay inventory variable. The analysis shows that the 30% reduction of cargo dwell time in inventory fluctuations is much more than the 30% increase in work force. One solution could be increasing storage area which, apart from being a very expensive investment, may be not feasible due to space limitations. Consequently, terminal operators are trying to decrease average dwell time. In order to do so, the main factors which influence the number of days a container stays in the terminal need to be determined.