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Optimization of order policies in supply networks

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  • Göttlich, S.
  • Herty, M.
  • Ringhofer, C.

Abstract

The purpose of this paper is to develop a model which allows for the study and optimization of arbitrarily complex supply networks, including order policies and money flows. We propose a mathematical description that captures the dynamic behavior of the system by a coupled system of ordinary differential delay equations. The underlying optimization problem is solved using discretization techniques yielding a mixed-integer programming problem.

Suggested Citation

  • Göttlich, S. & Herty, M. & Ringhofer, C., 2010. "Optimization of order policies in supply networks," European Journal of Operational Research, Elsevier, vol. 202(2), pages 456-465, April.
  • Handle: RePEc:eee:ejores:v:202:y:2010:i:2:p:456-465
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    References listed on IDEAS

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    1. Bak, Per & Chen, Kan & Scheinkman, Jose & Woodford, Michael, 1993. "Aggregate fluctuations from independent sectoral shocks: self-organized criticality in a model of production and inventory dynamics," Ricerche Economiche, Elsevier, vol. 47(1), pages 3-30, March.
    2. Herty, M. & Ringhofer, C., 2007. "Optimization for supply chain models with policies," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 380(C), pages 651-664.
    3. Armbruster, D. & de Beer, C. & Freitag, M. & Jagalski, T. & Ringhofer, C., 2006. "Autonomous control of production networks using a pheromone approach," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 363(1), pages 104-114.
    4. Battiston, Stefano & Delli Gatti, Domenico & Gallegati, Mauro & Greenwald, Bruce & Stiglitz, Joseph E., 2007. "Credit chains and bankruptcy propagation in production networks," Journal of Economic Dynamics and Control, Elsevier, vol. 31(6), pages 2061-2084, June.
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    Cited by:

    1. Kolb, Oliver & Göttlich, Simone, 2015. "A continuous buffer allocation model using stochastic processes," European Journal of Operational Research, Elsevier, vol. 242(3), pages 865-874.
    2. Rarità, Luigi & Stamova, Ivanka & Tomasiello, Stefania, 2021. "Numerical schemes and genetic algorithms for the optimal control of a continuous model of supply chains," Applied Mathematics and Computation, Elsevier, vol. 388(C).

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