Simulation of the Profitability Model in Retail Industry Using System Dynamics Approach

Identifying the right strategy can help the retail industry activists to gain competitive advantage and to improve them. Therefore, in order to solve the issues related to selection of appropriate sales strategies and predict the consequences of their implementation in this area, this study uses system dynamics approach to present a comprehensive model. In this regard, wit using the proposed model, the degree of profitability in the retail industry has been investigated in accordance with sales strategic plans of activists in this industry. The simulation was done using Vensim DSS software and the findings of this study confirm that the retail industry in accordance with developed strategies will be able to access 62% of profitability level by the end of the 2022. For this purpose, 5 scenarios have been presented to promote the degree of profitability of this industry. The results of simulation confirm that these scenarios can improved the degree of profitability in this industry to approximately 67.5% to 80.5%.