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.