Optimal Control of Supply Chain Systems with Multiple Products
This chapter considers the supply chain systems producing multiple types of products serving different customers. We consider two problems as examples. The first is the joint optimal control problem for ordering and production decisions by extending the basic supply chain system in Chap. 2 to multiple products. The optimal control problem for raw material ordering and production capacity allocation over multiple types of products is formulated. Its optimal control structure is then investigated. The second problem is the optimal production capacity allocation in a failure-prone manufacturing supply chain producing two-type products. The structural characteristics of the optimal control policy are established explicitly. It is shown that the optimal policy can be characterized by three monotonic switching curves, which divide the state space into three control regions to determine the optimal production capacity allocation.