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Inventory control of supply chains: Mitigating the bullwhip effect by centralized and decentralized Internal Model Control approaches

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  • Garcia Salcedo, Carlos Andres
  • Ibeas Hernandez, Asier
  • Vilanova, Ramón
  • Herrera Cuartas, Jorge

Abstract

In this paper, a two-degrees-of-freedom Internal Model Control structure is incorporated in production inventory control for a supply chain system. This scheme presents an intuitive and simple parametrization of controllers, where inventory target tracking and disturbance (demand) rejection in the inventory level problems are treated separately. Moreover, considering that the lead times are known, this scheme presents a perfect compensation of the delay making the stabilization problem easier to handle. This control structure is formulated for a serial supply chain in two ways (by using a centralized and a decentralized control approach). The behavior of these inventory control strategies is analyzed in the entire supply chain. Analytical tuning rules for bullwhip effect avoidance are developed for both strategies. The results of controller evaluations demonstrate that centralized control approach enhances the behavior with respect to the inventory target tracking, demand rejection and bullwhip effect in the supply chain systems.

Suggested Citation

  • Garcia Salcedo, Carlos Andres & Ibeas Hernandez, Asier & Vilanova, Ramón & Herrera Cuartas, Jorge, 2013. "Inventory control of supply chains: Mitigating the bullwhip effect by centralized and decentralized Internal Model Control approaches," European Journal of Operational Research, Elsevier, vol. 224(2), pages 261-272.
    • Handle: RePEc:eee:ejores:v:224:y:2013:i:2:p:261-272
    DOI: 10.1016/j.ejor.2012.07.029
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    References listed on IDEAS

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    1. Jaksic, Marko & Rusjan, Borut, 2008. "The effect of replenishment policies on the bullwhip effect: A transfer function approach," European Journal of Operational Research, Elsevier, vol. 184(3), pages 946-961, February.
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    1. H. Norouzi Nav & M. R. Jahed Motlagh & A. Makui, 2017. "Robust controlling of chaotic behavior in supply chain networks," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(6), pages 711-724, June.
    2. Zhu, Wanshan & Wu, Zhengping, 2014. "The stochastic ordering of mean-preserving transformations and its applications," European Journal of Operational Research, Elsevier, vol. 239(3), pages 802-809.

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