Chaos Theory in Operations Research

The purpose of this paper is to illustrate the potential importance of non-linear dynamical systems theory in OR. After a brief introduction into some basic concepts. We study an advertising diffusion model to exemplify the composition of chaos and optimalily in dynamic programming. It turns out that economies of scale may imply period three cycle and consequently topological chaos. Furthermore, we present an outlook to further potential applications of non-linear dynamical systems in OR/MS queing systems are briefly discussed whose random coding fluctuations are endogenously generated in a pure deterministic framework. Among the various paradigms favouring complex behaviour are dynamic strategic interactions, slow-fast systems, and cellular automata.

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