Simulation for assessing security-based policies in import/export operations

In today’s business environment, manufacturing and distribution companies have elevated their concern for security. They are working hard to ferret out risks and inefficiencies that may occur as their products and services move along the supply chain network. In this study we consider security issues from the stand point of a shipping agency providing import/export services. The objective of our study consists in the evaluation of security-based operating procedures and modalities that can lead to significant reductions in the controls that occur within the company activity due to both inside and third-party formalities (e.g. controls performed by the local Customs Office). The costs and benefits related to the adoption of new security-based policies and practices are estimated via discrete-event simulation. In the output analysis of multiple simulation replications, significant computational savings are achieved by introducing a fixed-point procedure to generate confidence intervals for the security-based performance measures of interest.