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The need to explicitly select the best review model in inventory control system is greater than ever because managing and controlling inventories are difficult under intense competition. In this study, three important questions are answered in inventory control system: which review model (periodic or continuous) should be used; which objective function of review model should be used to increase competitiveness of the supply chain; how to find the optimal values of initial inventory, reorder point, and order-up-to level for each Distribution Centre (DC) and each Supplier. We proposed an Optimization via Simulation (OvS) approach to determine the best inventory control system with supplier selection and to obtain a remarkable amount of saving while increasing the competitive edge in a fully stochastic supply chain environment. According to the results, total supply chain cost can be improved at least 22 % and at most 66 % on average with proposed continuous review model.

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A real-world inventory control system, due to its nonlinear, stochastic, time-dependent nature, and the presence of complex interactions between supply chain members, can become quite challenging to optimize and requires a complex model. At this point, the Simulation Optimization (SO) model gains a better understanding of the complex and messy phenomenon of the inventory control of supply chain members. By creating SO models for Distribution Center (DC)s and Suppliers, we wish to present flexible and comprehensible research on the important decision of whether to minimize the differences between total overordering cost and total underordering cost (Model 1) or to minimize the total supply chain cost (Model 2). We also try to point out several important issues: the optimal value of the initial inventory, the reorder point, and the order-up-to level in continuous (s, S) policy for each DC and each Supplier; whether SO models can successfully integrate the supplier selection and continuous (s, S) policy for the supply chain environment; how to apply statistical analysis skills to compare these SO models with a greater level of detail. According to the cost analysis, the total supply chain cost of Model 1 is improved approximately 22% with Model 2. Also, Model 2 is the best one according to quantity-based analysis, order-based analysis, probability-based analysis, and lead-time-based analysis. Model 2 can be successfully applied for the actual situation of the supply chain inventory system and companies can obtain a remarkable amount of saving while increasing their competitive edge.