A Supply Chain Network Economy Modeling and Qualitative Analysis.pdfVIP

A Supply Chain Network Economy: Modeling and Qualitative Analysis Ding Zhang and June Dong School of Business State University of New York at Oswego Oswego, New York 13126 and Anna Nagurney Department of Finance and Operations Management Isenberg School of Management University of Massachusetts Amherst, Massachusetts 01003 To appear in Innovations in Financial and Economic Networks Anna Nagurney, editor, Edward Elgar Publishers 2003 Abstract: This paper presents a new framework for supply chain networks, using graph theory, optimization theory, and variational inequality theory. It develops a general network model of a supply chain economy to study supply chain versus supply chain competition. The proposed franework con- siders the transformation and pricing of the material ?ows as they propagate through the network from origins, associated, for example, with raw material suppliers, to destinations - the consumer markets. The network includes both operation and interface links, with an operation link representing a business operation such as manufacturing, storage, and/or transportation, while an interface link represents a business to business bridge. The model allows for the formulation and analysis of both intra-chain cooperation and inter-chain competition, and predicts the winning supply chains, which are those that carry positive ?ow. The model has the notable feature that as many links and any topology as needed can be utilized to describe the supply chain structures to capture both cooperation as well as competition. The network model is also analyzed in terms of existence and uniqueness of solutions. 1 1. Introduction This paper proposes a modeling intitiative that is network-based to for- malize both intra supply chain cooperation and inter supply chain competi- tion. In particular, we propose a general network model for a supply chain economy since it is