Microeconomic Characterization of Supply Network Integration in a Multi-product Manufacturing Environment

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Date

2006

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Publisher

Japan Society of Precision Engineers, Japan

Abstract

This paper presents a theoretical framework for supply network integration in a multi-product manufacturing economy making use of the walrasian market system. We propose a method of dissolving a supply network into a competitive market and then applying the theory of Computable General Equilibrium (CGE) to find an optimal allocation of resources. Agents in the supply network are represented using the Cobb-Douglas (CD) function with a constant return-to-scale. A simulation program based on Market-Oriented Programming (MOP) was developed to mimic the trading environment in order to search for a pareto-allocation of resources in the network. The experimental results presented reveal that this framework can be adapted for use in drafting a holistic picture of a supply network in a multi-product manufacturing environment.

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Keywords

Market-Oriented Programming, Pareto-allocation, Supply Network, Computable General Equilibrium, Walrasian Market

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