Dynamics of a control theory ordering system

Abstract

The supply chain performance has become a key success factor in today's competitive business environment. This study aims at considering its core element-the ordering policy. The emphasis is carried upon the behaviour of the system in a dynamic environment. As a consequence, we use control theory grounds to define and analyse our system. The bullwhip effect and the flexibility are the two main concepts we focus on. They epitomize a tradeoff common to quite a number of systems, that is being flexible without costing too much. To quantify these two concepts, we adopt different dynamic approaches and define new metrics. The profit issue is also introduced as a third dimension. In this study, supply chain managers will find an intuition-builder as well as a quantitative-oriented analysis which can help them make more consistent decisions.