Investigation of influence of modeling fidelities on supply chain dynamics

In this paper, a three-echelon supply chain model is analyzed to determine strategies to reduce the supply chain system dynamics. Uniqueness of this research stems from the use of multiple models with varying degrees of detail representing the same supply chain. The significance of a detailed supply chain model on the quality of result is made clear. Factors employed to build an abstract to a detailed model include: transportation and production delay, demand at the retailer, and production and transportation capacity. It is shown that the system dynamics itself varies with increasing detail in the model. In addition, it is examined to see if a strategy found effective in improving the system dynamics with an abstract model is effective with a detailed model. It is established that the strategy found to be the most effective on an abstract model is not always the best strategy for the real supply chain.