The Impact of Feedback Information on Dynamics Performance of Production-Inventory Control Systems

Abstract

The aim of this paper is to examine the beneficial impact of feedback information in the dynamics of production-inventory control systems. Two production-inventory control system models are analyzed: APIOBPCS and 2APIOBPCS models. The simulation-based experiment designs were conducted by using the state-space equations of the two models. The bullwhip effect as measured by the variance ratio between the order rate and the consumption rate, and inventory responsiveness as measured by the Integral of Absolute Error between the actual and the target levels of inventory, are two metrics used to evaluate the performance of the production-inventory control system in response to a random customer demand. To ensure that both models work under optimal performance, multi-objective particle swarm optimization (MOPSO) is employed to address the problem of tuning the controller’s parameters. The simulation results show the 2APIOBPCS model outperforms the APIOBPCS model at achieving the desired bullwhip effect and being able to provide better inventory responsiveness. The improvement in the inventory responsiveness becomes more significant when the system operates under mismatched lead time and/or an initial condition.