Effect of Ordering Policies on Complex Dynamics Behaviours in a Discrete-Type Manufacturing Industry Supply Chain System

Abstract The beer game model is a typical paradigm used to study complex dynamics behaviours in production–distribution systems. The model, however, does not accord with current practical supply chain system models in discrete-type manufacturing industry, which are generally composed of retailers, distributors, manufacturers with internal supply chain, and suppliers. To describe how ordering policies influence the complex dynamics behaviour modes and operating cost in a general discrete-type manufacturing industry supply chain system, a high dimension piecewise-linear dynamics model is built for the supply chain system. Five kinds of ordering policy combination are considered. The distribution of both the largest Lyapunov exponent of effective inventory and average operating cost per cycle is obtained by simulation in a policy space. The simulation shows that for the general discrete-type manufacturing industry supply chain system, the upper chaotic corners emerge besides the lower chaotic corners in the policy space expressing the distribution of system behaviour mode, and that the ordering policies at each supply chain node as well as their combination have very significant effect on the topology of the distribution of both system behaviour mode and operating cost in the policy space. We find that chaos is not always corresponding to high cost, and the “chaos amplification” is not completely relevant to the “cost amplification”.