Economic materials-product chain models: Current status, further development and an illustrative example

It is the objective of this paper to discuss the current status of M-P chain modelling and to show possibilities for further development. It will be argued that the Takayama-Judge price equilibrium activity model presents a good basis for M-P chain modelling. This quadratic programming (QP) approach permits the development of dynamic multi-stages-multi-products models. A transformation of the QP approach into linear complementarity programming (LCP) format leads to a flexible and high-capacity tool for product system analysis. The capability of the proposed approach is shown by an illustrative example, the adapted real-world M-P chain of window frame production in Germany.