Exploring the oscillatory dynamics of a forbidden returns inventory system

Xun Wang, Stephen M. Disney and Jing Wang

International Journal of Production Economics, 2014, vol. 147, issue PA, 3-12

Abstract: We present an analytical investigation of the intrinsic oscillations in a nonlinear inventory system where excessive inventory cannot be returned to the supplier. Mathematically this is captured by a non-negative constraint on the replenishment order. By studying the eigenvalues of the characteristic matrices of the system, the criteria for different types of dynamic behaviour (including convergence, periodicity, quasi-periodicity, chaos, and divergence) are derived. The upper and lower bounds of the order and inventory oscillations are found via a time-domain analysis. Our results are verified by bifurcation diagrams. We find that the closer the replenishment rule feedback parameters are to the convergence area, the milder the intrinsic oscillation of the system.

Keywords: Nonlinear inventory system; Forbidden returns; Oscillation; Bifurcation; Stability (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:147:y:2014:i:pa:p:3-12

DOI: 10.1016/j.ijpe.2012.08.013

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