Abstract
AbstractThe movement of goods through a supply chain depends on both the physical flow of goods and on the economic decisions of each entity along the chain, including price discovery and inventory disposition decisions. This paper presents a methodological contribution to the system dynamics and supply chain research communities by developing a novel framework for supply chain models by combining three classic modeling methods: co‐flow differential equation structures, spot price discovery, and multinomial logistic choice modeling. The relative economic values of possible dispositions of goods, including outright disposal, are considered. For work‐in‐progress, development is considered in terms of the economic value that an additional unit of time will bring to the finished good, and the interplay of these considerations drive goods through, or out of, supply chains. Incorporating these mechanisms can produce materially different behavior modes and can be applied to multiple levels of aggregation within a production process. © 2022 The Author. System Dynamics Review published by John Wiley & Sons Ltd on behalf of System Dynamics Society.
Published Version (
Free)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
