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Keywords:

  • production-inventory models;
  • Brownian motion;
  • uncertainty

The “Principle of Least Action" is the foundational principle of fundamental physics. Application of this principle to the supply chain naturally results in an “uncertainty principle” linking variation in production to variation in net-inventory. The model also provides an easy means of determining the stationary distribution of net-inventory for a variety of control strategies. The formalism results in a control strategy that outperforms commonly used control methods.