Open- and Closed-Loop Supply Chain Dynamics: Specification and Exploration of an Agent-Based Model

Christopher S. Ruebeck, Lafayette College
Jeffrey O. Pfaffmann, Lafayette College

Eastern Economic Journal 37(1) January 2011
Symposium on Agent-based Computational Economics
Editorial proof


We develop an inter-firm shipping pallet supply chain model and explore the geographic features of market structures that can evolve within it, focusing on the common resource nature of pallet durability.  While exploring the model’s parameter space we find regions in which the outcomes do not put the model’s assumptions in doubt.  The insights reveal modeling considerations for an “open-loop” structure, where the shipping pallets received by retailers pass through third parties before returning to manufacturers.  Our approach to validation is at the level of “stylized facts,” accepting model parameters that produce outcomes matching characteristics of firms’ geographic location.

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