Factory Factory model
	Distribution Distribution model
	Retail Retail model
	InventoryForresterNormalNoise Inventory simulation with random orders
	InventoryForresterSinOneYear Inventory simulation with sinusoidal orders
	InventoryForresterSinOneYearCapacity Inventory simulation with sinusoidal orders
	InventoryForresterStep Inventory simulation with sinusoidal orders
	Utilities Utility models of Forrester's inventory model

In Forrester (1961), a factory-distribution-retail inventory system is discussed in depth, modeled with the System Dynamics notation. At the time, the models had to be constructed using textual representations (Dynamo). This very system is re-implemented here graphically using the SystemDynamics library of Modelica, and the same simulations are carried out as are given in the book by Forrester. Effects of amplification, delays, and information feedback are demonstrated in the simulations. Among other things, it is shown, how small changes in retail sales can lead to large swings in factory production.

The model is not introduced in detail at this place. The interested reader is referred to Forrester (1961). Roughly, the system is divided into a retail, a distribution, and a factory part, each containing inventories for the goods (consumer goods, such as refrigerators, for example) and a corresponding logic for ordering or producing items to be sold to customers. The only input to the system is customer orders RRR (Requisitions Received at Retail), and the internal variables of the system (levels and rates) are to be investigated when customer demand fluctuates.

References:

1. Forrester, J.W. (1961), Industrial Dynamics, M.I.T. Press, 479p.

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