A model for capturing the effects of Macroeconomic indicators on aggregate planning in a supply network
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Date
2006
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Tokyo Institute of Technology, Japan.
Abstract
As competition in the global market is getting tougher, firms are turning to their
supply networks in order to improve their competitiveness. This is done by
improving the performance of some components of the supply network while not
violating the requirements of the other components. This is undoubtedly a
difficult task to achieve considering the autonomous nature of these units of the
network and also their distributed topology. Within the last few years, firms
have resulted into a globalization of their industrial workspace in order to put a
lid on cost as well as harness the opportunities of new markets. The
globalization of these workspaces however introduces new challenges to the
supply chain of these firms in the form of impediments to trade across national
borders. We present a model for estimating the effects of some of these
macroeconomic indicators on a firms supply network. We define the supply
network as a virtual enterprise network which has the ability of taking advantage
of the technology provided by existing telecommunication networks including the
internet, to conduct transactions and also provide for easy reconfiguration across
enterprise boundaries. In this model, enterprise units are represented as trading
agents operating within a competitive market structure to arrive at a paretoallocation
of resources in the network. We first describe a process of trading
among the agents within a Walrasian market structure and then we consider the
effects of two macroeconomic variables – per-capital income and interest rates –
on the pareto-allocation of resources in the virtual enterprise network.
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Keywords
Aggregate Planning, Macroeconomic Indicators, Supply Network