A Model Predictive Control framework for robust management of multi-product, multi-echelon demand networks

Abstract: Model Predictive Control (MPC) is presented as a robust, flexible decision framework for dynamically managing inventories and meeting customer demand in demand networks (a.k.a. supply chains). Ultimately, required safety stock levels in demand networks can be significantly reduced as a result of the performance demonstrated by the MPC approach. The translation of available information in the supply chain problem into MPC variables is demonstrated with a two-node supply chain example. A six-node, two-product, three-echelon demand network problem proposed by Intel is well managed by a partially decentralized MPC implementation under simultaneous demand forecast inaccuracies and plant-model mismatch.