Delays in supply chains due to decision making (of managers) and lead time (in production) cause undesirable effects to inventory levels. Via system’s thinking, key mechanisms leading to such effects are investigated by analyzing the stability of an inventory, departing from a commonly studied model. On this model, two distinct delays and a PI controller to remove offset in inventory, are incorporated. On the plane of delays, stable and unstable operational behavior of inventory level are identified on so-called stability maps. Next, effects of PI controller to stability are revealed and this controller is optimized for avoiding oscillatory nature of inventory level. Case studies are provided to demonstrate counter-intuitive effects of delay presence to supply chain management and how stability maps may serve as decision-making tools for managers in achieving better control on inventory behavior.

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