Integrating system dynamics and multi-objective optimisation for manufacturing supply chain analysis

The aim of this paper is to address the dilemma of supply chain management (SCM) within a truly Pareto-based multi-objective context. This is done by introducing an integration of system dynamics and multi-objective optimisation. An extended version of the well-known pedagogical SCM problem, the Beer Game, originally developed at MIT since the 1960s, has been used as the illustrative example. As will be discussed in the paper, the integrated multi-objective optimisation and system dynamics model has been shown to be very useful for revealing how the parameters in the Beer Game affect the optimality of the three common SCM objectives, namely, the minimisation of inventory cost, backlog cost, and the bullwhip effect. [Received 22 April 2013; Revised 8 July 2013; Accepted 31 August 2013]