Modal control theory and industrial dynamics — a dual approach to the design of policy decisions in a multistage production-inventory system

This paper deals with the problem of designing realistic policy decisions in a Multistage Production-Inventory System (MPIS). First Modal Control Theory has been utilised for the synthesis of control policies in a two-stage production-inventory system. The structure of the resultant control policies, though somewhat idealised, has an underlying implication of central control. Two types of realistic policy decisions are made and tested in Forresters's ID simulation study of the MPIS. It is shown that both the policies result in more attenuated system behaviour than that obtained by Forrester.