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

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

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    Article provided by Elsevier in its journal European Journal of Operational Research.

    Volume (Year): 224 (2013)
    Issue (Month): 2 ()
    Pages: 261-272

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    Handle: RePEc:eee:ejores:v:224:y:2013:i:2:p:261-272
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    1. Garcia, C.A. & Ibeas, A. & Herrera, J. & Vilanova, R., 2012. "Inventory control for the supply chain: An adaptive control approach based on the identification of the lead-time," Omega, Elsevier, vol. 40(3), pages 314-327.
    2. Amini, Mehdi & Li, Haitao, 2011. "Supply chain configuration for diffusion of new products: An integrated optimization approach," Omega, Elsevier, vol. 39(3), pages 313-322, June.
    3. Schwartz, Jay D. & Rivera, Daniel E., 2010. "A process control approach to tactical inventory management in production-inventory systems," International Journal of Production Economics, Elsevier, vol. 125(1), pages 111-124, May.
    4. Aggelogiannaki, Eleni & Sarimveis, Haralambos, 2008. "Design of a novel adaptive inventory control system based on the online identification of lead time," International Journal of Production Economics, Elsevier, vol. 114(2), pages 781-792, August.
    5. Deshpande, Paras & Shukla, Deepak & Tiwari, M.K., 2011. "Fuzzy goal programming for inventory management: A bacterial foraging approach," European Journal of Operational Research, Elsevier, vol. 212(2), pages 325-336, July.
    6. 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.
    7. Hoberg, Kai & Bradley, James R. & Thonemann, Ulrich W., 2007. "Analyzing the effect of the inventory policy on order and inventory variability with linear control theory," European Journal of Operational Research, Elsevier, vol. 176(3), pages 1620-1642, February.
    8. Zhang, Xiaolong & Burke, Gerard J., 2011. "Analysis of compound bullwhip effect causes," European Journal of Operational Research, Elsevier, vol. 210(3), pages 514-526, May.
    9. Balan, S. & Vrat, Prem & Kumar, Pradeep, 2009. "Information distortion in a supply chain and its mitigation using soft computing approach," Omega, Elsevier, vol. 37(2), pages 282-299, April.
    10. Disney, S. M. & Towill, D. R., 2003. "On the bullwhip and inventory variance produced by an ordering policy," Omega, Elsevier, vol. 31(3), pages 157-167, June.
    11. Dejonckheere, J. & Disney, S. M. & Lambrecht, M. R. & Towill, D. R., 2003. "Measuring and avoiding the bullwhip effect: A control theoretic approach," European Journal of Operational Research, Elsevier, vol. 147(3), pages 567-590, June.
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