Dynamic Analysis of the Forrester Supply Chain

• The basic production distribution system presented by Forrester in his book "Industrial Dynamics" is analysed. Although many subsequent authors have quoted the original simulation results, especially when referring to supply chain behaviour, a complete analysis of the model has yet to be published. This dissertation fills this gap. As the starting point the Dynamo program representing the system is transformed to a block diagram representation commonly used in control theory. A general model for one echelon of the system is then devised and analysed. Simulations are used to cross check the analysis and to compare the behaviour of sub-systems based on varying degrees of simplification. This general model is then put into the context of the full system and further analysis and simulation is performed to gain a deeper understanding for the dynamics than is obtained from the Forrester results alone. Five different approaches are then used to improve the system.- Tuning the policy parameters.- Reduction of delays in the system.- Removal of the distributor echelon.- Improvement of the decision rules.- Improvement via better use of information in the system.Finally two or more of these alternative approaches are combined to find a new design that behaves better than the original Forrester model.

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