Production Planning, Oligopoly and Supply Chains
In this chapter we develop models that describe how prices, production rates and distribution activities evolve over time and influence one another for three output market structures: 1. perfect competition 2. monopoly, and 3. oligopoly. In particular, we apply the material from previous chapters to the modeling and computation of production, distribution, and supply chain decisions made by firms operating within the three competitive environments mentioned above. Throughout this chapter our perspective is deterministic, and the dynamic games considered are open loop in nature with perfect initial information.We begin with aspatial models and move to models with explicit network path flows. We shall deal exclusively with finite terminal times and see that policies near the terminal time are of great importance to the lifetime profitability of firms. One of our goals will be to study how policies on inventory remaining at the terminal time as will as the value of such residual inventories when liquidated can influence operations throughout a firm’s history.
KeywordsSupply Chain Variational Inequality Production Planning Terminal Time Adjoint Variable
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List of References Cited and Additional Reading
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- Smith, V. L. (1961). Invenstment and Production: A Study in the Theory of the Capital Using Enterprise. Cambridge, MA: Harvard University Press.Google Scholar