Conceptual Agent based Modeling in Supply Chain: An Economic Perspective

Abstract: The implementation of government legislation, social responsibility, environmental concerns regarding the reduction of waste, hazardous material and other consumer residuals have made the competition between the firms stricter than ever and nowadays firms that want to survive need a more productive and innovative approach toward the financial aspects of their businesses.his paper presents a conceptual supply chain model integrating financial and physical flows. The main idea of this paper is to identify financial tools and show the usefulness of them in order to increase the competitiveness of the supply chain as a whole in the volatile markets. In doing so, we consider the role of a financial service provider and try to incorporate the effects of supply chain finance concept on the working capital i.e. liquidity of the member entities. So, the main contribution of this research is to address an innovative approach to model financial flows in supply chain and to introduce the financial tools (supply chain finance practices) in the supply chain framework employing Economic Value Added and cash-to-cash cycle as performance measures and finally devise a conceptual agent-based model and show how agent based modeling can be beneficial in this field.