Abstract
If each inventory in a supply chain, comprising a network of production and transportation facilities, is optimized separately by some EOQ formula, the overall result may be far from optimal. If the objective of inventories is to reduce the variability of production and delivery rates, then this can be modelled as a network system with feedback links. The propagation of demands through the network is described by certain “propagation vectors”, and the optimization is with respect to certain feedback factors.
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References
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