Complex dynamic behaviors of supply chain system with constraint of production capacity

A supply chain system model with constraint of production capacity is established based on the APVIO (Automatic Pipeline, Variable Inventory and Order) policy. A series of simulating experiments are employed to examine the characteristics of this model. The simulating results reveal the complex influence of capacity constraint on the supply chain system. For one-echelon systems, complex behaviors can be simplified by the constraint. However, for two-echelon systems, when the upstream firm is constrained by production capacity, chaotic ordering behaviors may occur. In this paper, Lyapunov exponent and bifurcation diagrams show their strong abilities for measuring the system complexity level. The findings of this research suggest that if supply chain members are subject to production capacity, they should adopt effective measures to avoid operating complexity and make use of beneficial effects induced by production capacity.