2022/09/11 by José Caiza, Caiza, Jose I., Ian Walter +7
Business, Management and Accounting · #FOS: Electrical engineering #FOS: Mathematics #Optimization and Control (math.OC) #Supply Chain Resilience and Risk Management #Supply Chain and Inventory Management #Sustainable Supply Chain Management #Systems and Control (eess.SY) #electronic engineering #information engineering
paper · pdf · doi:10.48550/arxiv.2209.04789
openalex publication_date 2022/09/11 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
In this paper, we formulate an optimal ordering policy as a stochastic control problem where each firm decides the amount of input goods to order from their upstream suppliers based on the current inventory level of its output good. For this purpose, we provide a closed-form solution for the optimal request of the raw materials for given a fixed production policy. We implement the proposed policy on a 15-firm acyclic network based on a real product supply chain. We first simulate ideal demand situations, and then we implement demand-side shocks (i.e., demand levels outside of those considered in the policy formulation) and supply-side shocks (i.e., halts in production for some suppliers) to evaluate the robustness of the proposed policies.