Research Progress Report 208 —	September, 1965
Simulator Program for Feed Manufacturing Inventory Control
Joseph H. Stafford, Economic Research Service, USDA and James C. Snyder, Agricultural Economics
INTRODUCTION
The simulator program is a computer system designed to simulate the stochastic flow of feed ingredients into and out of a feed manufacturing firm. The program summarizes inventory carrying costs and stock-out costs of simulated operations under alternative procurement safety-stock policies.
The primary purpose of the program is to measure the expected stock-out costs and carrying costs which would result from alternative inventory safety-stock policies. The user may measure the average weekly costs resulting from the simulated use of a given safety-stock policy over a large number of weeks. In addition to evaluating alternative safety-stock policies, the user may also evaluate the effect of other variables on carrying costs and stock-out costs. Some possible e-valuations are:
1. The effects of a different proportion of truck and rail shipments of feed ingredients.
2. The effects of changes in the accuracy of forecasts of weekly ingredient requirements.
3. The effects of using storage bins of a different size.
4. The effect of more day-to-day fluctuation in production rates.
The simulator program is written in the FORTRAN II compiler language. The program consists of a main line program and two subprograms. In addition, the program requires a subroutine for generating uniformly distributed random numbers.
For the program as listed in this appendix the random number generator was written in FAP.
The program as listed was run on the IBM 7090 computer at Purdue University. The program was originally written for the 60K model of the IBM 1620 at Purdue. The 1620 version of the routine used a different random number generator and different in-put-output statements. These were the only changes made in converting the program for the 7090. Since the program is written in FORTRAN it can be used on any machine which has a FORTRAN compiler and a memory capacity of at least 60,000 digits .
The program simulates three major operations:
1. Forecasting the magnitude of the ingredient requirements for one week's production,
2. Scheduling incoming ingredient shipments for one week's production according to forecasted requirements and a safety-stock policy and,
3.	Recording the cost effects of the
PURDUE UNIVERSITY • Agricultural Experiment Station • Lafayette, Indiana