State-space proportional-integral inventory replenishment practices for bullwhip effect investigation in supply chains

Author

Papanagnou, C.I. ; Tzionas, P.

Author_Institution

Dept. of Autom., Alexander Technol. Inst. of Thessaloniki, Thessaloniki, Greece

fYear

2009

fDate

8-11 Dec. 2009

Firstpage

558

Lastpage

562

Abstract

Inventory replenishment practices play significant role in supply chain networks and they are strongly associated with overall supply chain performance. This paper presents a state-space model of a stochastic series multi-node supply chain, controlled via local proportional-integral inventory replenishment policies. The model is triggered by identically distributed and uncorrelated random variables which represent uncertain customer demand. The proposed model is analyzed under stationarity, provided that control parameters belong to a certain range which is clearly specified. Simple recursive techniques are developed to calculate explicitly the associated covariance matrix in closed parametric form. This allows to analyze the effect of control parameters in the inventory practices on the bullwhip effect. It is shown that proportional-integral replenishment practices can be applied to explain in qualitative terms the main performance and stability properties of supply chains.

Keywords

covariance matrices; inventory management; state-space methods; supply chain management; bullwhip effect investigation; closed parametric form; covariance matrix; inventory practices; local proportional-integral inventory replenishment policies; overall supply chain performance; random variables; simple recursive technique; state-space model; state-space proportional-integral inventory replenishment; stochastic series multinode supply chain; supply chain networks; uncertain customer demand; Automation; Control theory; Covariance matrix; Inventory control; Pi control; Proportional control; Stability; Stochastic processes; Supply chain management; Supply chains; Supply chain management; bullwhip effect; control theory; covariance matrix; inventory control;

fLanguage

English

Publisher

ieee

Conference_Titel

Industrial Engineering and Engineering Management, 2009. IEEM 2009. IEEE International Conference on

Conference_Location

Hong Kong

Print_ISBN

978-1-4244-4869-2

Electronic_ISBN

978-1-4244-4870-8

Type

conf

DOI

10.1109/IEEM.2009.5373276

Filename

5373276