Title

Internal Supply Chain Coordination in the Electric Utility Industry

Publication Type

Journal Article

Publication Date

2009

Abstract

Electric utilities have a well-established vertical internal and external supply chain. Theoretically, information sharing, involving production, inventory, and other policy variables, between chain entities can improve supply chain performance. Such sharing relies on a systematic determination of the optimal policy variables for the chain. This paper presents an analysis of the electric utility’s decision problem based on an optimal control model in a competitive market environment. Optimal production and inventory policies are developed for a centralized supply chain under full information sharing. The model and policies are tested with electric utility industry data, and performance implications are discussed for electric utility managers and public regulators.

Keywords

Optimal control, Electric utilities, Supply chain management, Econometrics

Discipline

Computer Sciences | Operations Research, Systems Engineering and Industrial Engineering

Research Areas

Information Systems and Management

Publication

European Journal of Operations Research

Volume

196

Issue

2

First Page

619

Last Page

627

ISSN

0377-2217

Identifier

10.1016/j.ejor.2008.03.041

Publisher

Elsevier

Additional URL

http://dx.doi.org/10.1016/j.ejor.2008.03.041