This paper examines the stability of autonomous supply chains. In an autonomous supply chain, suppliers only communicate with their downstream neighbor; i.e., their immediate customer. The inventory management policies used by the suppliers characterize a chain. An important property of a policy is its "gain", which relates marginal changes in the average steady state inventory to small changes in the steady state demand rate. It is shown that all autonomous policies with positive gains are unstable when applied to a homogeneous supply chain if they do not use future order commitments. This generates the so-called "bullwhip" effect. Stability conditions for policies of all types are given. The paper also discusses a family of stable, autonomous policies that can dynamically maintain any desired inventory level for any demand rate. The family includes just-in-time strategies as a special case. If the target inventories are admissible, i.e. they are large enough to prevent stock-outs in the steady state (with some margin of safety) then the proposed policies avoid stock-outs in the dynamic case. Simulations are used as an illustration.

On the Stability of Supply Chains

Stability of inventory dynamics in supply chains with three delays

An adaptive model predictive control configuration for production-inventory systems

The behavioural causes of bullwhip effect in supply chains: A systematic literature review

Supply chain management is a topic that many practitioners and students generally find difficult to understand Boudette [Boudette, N. 2005. Chrysler offers bonuses to dealers: Move to reduce inventory aims to close year strong, but the reaction is mixed. The Wall Street Journal December 13]. The authors present a supply chain game that they have found to be an effective tool to increase student interest in and comprehension of supply chain management. The supply chain game literature is briefly reviewed. The poker chip game is discussed with respect to the well-known Beer Game. The poker chip game is a multi-product, multi-customer, multi-echelon, stochastic supply chain game used to teach the problems of traditional push models economic order quantity/reorder point and Min-Max inventory models and the elements of the new pull models Just inTime and Theory of Constraints.

https://pubsonline.informs.org/doi/pdf/10.1287/ited.6.3.3

The Poker Chip Game: A Multi-product, Multi-customer, Multi-echelon, Stochastic Supply Chain Network Useful for Teaching the Impacts of Pull versus Push Inventory Policies on Link and Chain Performance

The concept of bounded rationality in decision-making and research on its relation to aggregate system dynamics is briefly recalled By recasting the well-known beer game as a Smith predictor control system, a natural measure of the level of bounded rationality in the decision-making process is derived The results herein do accord with those of the original beer game paper In addition, they engender a new interpretation of an important model parameter as a direct measure of the level of bounded rationality inherent in decision-making A stability analysis is then employed to support and qualify the assertion that the level of bounded rationality can adversely affect the aggregate dynamic behaviour of such supply chains The analytical basis of these calculations enables the quantification of the potential cost improvements resulting from more desirable supply-chain dynamics These follow from reduced volatility through improved decision-making in the supply chain This approach is designed to inform the

/pdf/quantifying-bounded-rationality-managerial-behaviour-and-the-3tgzdy7dwr.pdf

C. E. Riddalls

Papers

Quantifying bounded rationality: Managerial behaviour and the Smith predictor