Simulation model of professional service personnel inventory

Supply chains are found in service organisations as well as in manufacturing. A common type of supply chain is personnel. Firms such as accounting, consulting, or legal firms need to develop a chain of trained professionals who hone their skills through training and experience throughout their careers. While such firms have to consider these long‐range goals, they also need to manage operations in the short‐term to generate adequate profit, both through increasing demand for their services as well as controlling costs of delivering them. This paper applies a simple Monte Carlo simulation model to a legal firm decision of managing short‐term capacity. Factors to include covering demand, minimising cost, and maintaining quality are considered. The simulation model deals with the uncertainties involved in demand, to include consideration of risk level. A hypothetical law firm (based loosely on an existing firm) is used as a basis for this analysis. Results emphasise that the tools developed for very different purposes work appropriately in this context.