Economic model predictive control for inventory management in supply chains

• We implement economic MPC for supply chain systems after a short review of the economic MPC closed-loop stability theory.
• We propose a novel multiobjective cost function that considers both economic cost and risk (modeled as penalty for deviations from safety stock).
• We provide an example of integrating control theory and scheduling method by identifying terminal constraints that ensure recursive feasibility for a scheduling problem.

In this paper, we propose economic model predictive control with guaranteed closed-loop properties for supply chain optimization. We propose a new multiobjective stage cost that captures economics as well as risk at a node, using a weighted sum of an economic cost and a tracking stage cost. We also demonstrate integration of scheduling with control using a supply chain example. We integrate a scheduling model for a multiproduct batch plant with a control model for inventory control in a supply chain. We show recursive feasibility of such integrated control problems by developing simple terminal conditions.