IDEAS home Printed from https://ideas.repec.org/a/bla/sysdyn/v39y2023i1p32-63.html
   My bibliography  Save this article

Dynamic supply chains with endogenous dispositions

Author

Listed:
  • James Paine

Abstract

The movement of goods through a supply chain depends on both the physical flow of goods and on the economic decisions of each entity along the chain, including price discovery and inventory disposition decisions. This paper presents a methodological contribution to the system dynamics and supply chain research communities by developing a novel framework for supply chain models by combining three classic modeling methods: co‐flow differential equation structures, spot price discovery, and multinomial logistic choice modeling. The relative economic values of possible dispositions of goods, including outright disposal, are considered. For work‐in‐progress, development is considered in terms of the economic value that an additional unit of time will bring to the finished good, and the interplay of these considerations drive goods through, or out of, supply chains. Incorporating these mechanisms can produce materially different behavior modes and can be applied to multiple levels of aggregation within a production process. © 2022 The Author. System Dynamics Review published by John Wiley & Sons Ltd on behalf of System Dynamics Society.

Suggested Citation

  • James Paine, 2023. "Dynamic supply chains with endogenous dispositions," System Dynamics Review, System Dynamics Society, vol. 39(1), pages 32-63, January.
    • Handle: RePEc:bla:sysdyn:v:39:y:2023:i:1:p:32-63
    DOI: 10.1002/sdr.1725
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sdr.1725
    Download Restriction: no
    File URL: https://libkey.io/10.1002/sdr.1725?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, Enero-Abr.
    2. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    3. Rachel Croson & Karen Donohue, 2006. "Behavioral Causes of the Bullwhip Effect and the Observed Value of Inventory Information," Management Science, INFORMS, vol. 52(3), pages 323-336, March.
    4. Arunachalam Narayanan & Brent B. Moritz, 2015. "Decision Making and Cognition in Multi-Echelon Supply Chains: An Experimental Study," Production and Operations Management, Production and Operations Management Society, vol. 24(8), pages 1216-1234, August.
    5. Hazhir Rahmandad & John Sterman, 2008. "Heterogeneity and Network Structure in the Dynamics of Diffusion: Comparing Agent-Based and Differential Equation Models," Management Science, INFORMS, vol. 54(5), pages 998-1014, May.
    6. Hau L. Lee & V. Padmanabhan & Seungjin Whang, 1997. "Information Distortion in a Supply Chain: The Bullwhip Effect," Management Science, INFORMS, vol. 43(4), pages 546-558, April.
    7. Navid Ghaffarzadegan & Richard C. Larson, 2018. "SD meets OR: a new synergy to address policy problems," System Dynamics Review, System Dynamics Society, vol. 34(1-2), pages 327-353, January.
    8. Niyousha Hosseinichimeh & Hazhir Rahmandad & Mohammad S. Jalali & Andrea K. Wittenborn, 2016. "Estimating the parameters of system dynamics models using indirect inference," System Dynamics Review, System Dynamics Society, vol. 32(2), pages 154-178, April.
    9. John D. Sterman, 1989. "Modeling Managerial Behavior: Misperceptions of Feedback in a Dynamic Decision Making Experiment," Management Science, INFORMS, vol. 35(3), pages 321-339, March.
    10. David R. Keith & John D. Sterman & Jeroen Struben, 2017. "Supply constraints and waitlists in new product diffusion," System Dynamics Review, System Dynamics Society, vol. 33(3-4), pages 254-279, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. George Backus, 2023. "Disequilibrium supply‐and‐demand allocation with differentiated products," System Dynamics Review, System Dynamics Society, vol. 39(4), pages 432-452, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tarikere T. Niranjan & Narendra K. Ghosalya & Srinagesh Gavirneni, 2022. "Crying Wolf and a Knowing Wink: A Behavioral Study of Order Inflation and Discounting in Supply Chains," Production and Operations Management, Production and Operations Management Society, vol. 31(3), pages 1071-1088, March.
    2. Fransoo, Jan C. & Udenio, Maximiliano, 2021. "The bullwhip effect," Other publications TiSEM 382aec81-b3b0-4696-bf00-5, Tilburg University, School of Economics and Management.
    3. John Sterman, 2018. "System dynamics at sixty: the path forward," System Dynamics Review, System Dynamics Society, vol. 34(1-2), pages 5-47, January.
    4. Yang, Y. & Lin, J. & Liu, G. & Zhou, L., 2021. "The behavioural causes of bullwhip effect in supply chains: A systematic literature review," International Journal of Production Economics, Elsevier, vol. 236(C).
    5. Hendijani, Rosa, 2021. "The effect of thinking style on dynamic systems performance: The mediating role of stock-flow understanding," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 95(C).
    6. Rosa Hendijani, 2021. "Analytical thinking, Little's Law understanding, and stock‐flow performance: two empirical studies," System Dynamics Review, System Dynamics Society, vol. 37(2-3), pages 99-125, April.
    7. Haines, Russell & Hough, Jill & Haines, Douglas, 2017. "A metacognitive perspective on decision making in supply chains: Revisiting the behavioral causes of the bullwhip effect," International Journal of Production Economics, Elsevier, vol. 184(C), pages 7-20.
    8. Ma, Yungao & Wang, Nengmin & He, Zhengwen & Lu, Jizhou & Liang, Huigang, 2015. "Analysis of the bullwhip effect in two parallel supply chains with interacting price-sensitive demands," European Journal of Operational Research, Elsevier, vol. 243(3), pages 815-825.
    9. Ghaffarzadegan, Navid & Xue, Yi & Larson, Richard C., 2017. "Work-education mismatch: An endogenous theory of professionalization," European Journal of Operational Research, Elsevier, vol. 261(3), pages 1085-1097.
    10. Manuel Brauch & Andreas Größler, 2022. "Holistic versus analytic thinking orientation and its relationship to the bullwhip effect," System Dynamics Review, System Dynamics Society, vol. 38(2), pages 121-134, April.
    11. Robert L. Bray & Haim Mendelson, 2012. "Information Transmission and the Bullwhip Effect: An Empirical Investigation," Management Science, INFORMS, vol. 58(5), pages 860-875, May.
    12. Deniz Preil & Michael Krapp, 2022. "Artificial intelligence-based inventory management: a Monte Carlo tree search approach," Annals of Operations Research, Springer, vol. 308(1), pages 415-439, January.
    13. Cantor, David E. & Katok, Elena, 2012. "Production smoothing in a serial supply chain: A laboratory investigation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(4), pages 781-794.
    14. Zotteri, Giulio, 2013. "An empirical investigation on causes and effects of the Bullwhip-effect: Evidence from the personal care sector," International Journal of Production Economics, Elsevier, vol. 143(2), pages 489-498.
    15. Enrique Holgado de Frutos & Juan R Trapero & Francisco Ramos, 2020. "A literature review on operational decisions applied to collaborative supply chains," PLOS ONE, Public Library of Science, vol. 15(3), pages 1-28, March.
    16. Özalp Özer & Yanchong Zheng & Yufei Ren, 2014. "Trust, Trustworthiness, and Information Sharing in Supply Chains Bridging China and the United States," Management Science, INFORMS, vol. 60(10), pages 2435-2460, October.
    17. Ignacio J. Martinez‐Moyano, 2024. "History of the Beer Game," System Dynamics Review, System Dynamics Society, vol. 40(2), April.
    18. Chatfield, Dean C. & Pritchard, Alan M., 2013. "Returns and the bullwhip effect," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 49(1), pages 159-175.
    19. Schmitt, Thomas G. & Kumar, Sanjay & Stecke, Kathryn E. & Glover, Fred W. & Ehlen, Mark A., 2017. "Mitigating disruptions in a multi-echelon supply chain using adaptive ordering," Omega, Elsevier, vol. 68(C), pages 185-198.
    20. Feng Liu & Mingjie Fang & Shufeng Xiao & Yangyan Shi, 2025. "Mitigating bullwhip effect in supply chains by engaging in digital transformation: the moderating role of customer concentration," Annals of Operations Research, Springer, vol. 344(2), pages 825-846, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:sysdyn:v:39:y:2023:i:1:p:32-63. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/0883-7066 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.