SUPPLY CHAIN MODELLING AND CONTROL UNDER PROPORTIONAL INVENTORY-REPLENISHMENT POLICIES

A novel state-space model of a multi-node supply chain is presented, controlled via local proportional inventory-replenishment policies. The model is driven by a stochastic sequence representing customer demand. The model is analyzed under stationarity conditions and a simple recursive scheme is dev...

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Bibliographic Details
Published inIFAC Proceedings Volumes Vol. 39; no. 3; pp. 277 - 282
Main Authors Papanagnou, C.I., Halikias, G.D.
Format Journal Article
LanguageEnglish
Published 2006
Subjects
Bullwhip effect
Covariance matrix Estimation
Information-sharing
State-space model
Supply Chain
Bullwhip effect
Covariance matrix Estimation
Information-sharing
State-space model
Supply Chain
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Summary:A novel state-space model of a multi-node supply chain is presented, controlled via local proportional inventory-replenishment policies. The model is driven by a stochastic sequence representing customer demand. The model is analyzed under stationarity conditions and a simple recursive scheme is developed for updating the covariance matrix. This allows us to characterize the “bullwhip effect” (demand amplification) in the chain and to solve an optimization problem for a three-node model involving the minimization of inventory subject to a probabilistic constraint on downstream demand. Finally issues related to estimation schemes based on local historical data are discussed.
ISSN:1474-6670
DOI:10.3182/20060517-3-FR-2903.00153