Design, Analysis and Optimization of Supply Chains

Chapter 1

A Static Versus a Dynamic View of Supply Chains

Introduction

Supply chains are often viewed as a simple, static system with constant demand, constant orders, and constant production. Generally, these supply chains are viewed as a simple linear “chain” of participants such as a retail store, a distributor, a factory, and perhaps a key supplier to the factory as shown in Figure 1.1.

At the next level of complexity, these linear chains are viewed as a static stochastic system having constant means and constant standard deviations for demand, orders, and production. This statistically based view of the static supply chain resulted in several well-known optimization solutions such as the economic order quantity and optimum reorder points ...