Multi agent system for negotiation in supply chain management

Abstract

Supply chain management (SCM) is an emerging field that has commanded attention and support from the industrial community. Supply chain (SC) is defined as the chain linking each entity of the manufacturing and supply process from raw materials through to the end user. In order to increase supply chain effectiveness, minimize total cost, and reduce the bullwhip effect, integration and coordination of different systems and processes in the supply chain are required using information technology and effective communication and negotiation mechanism. To solve this problem, Agent technology provides the distributed environment a great promise of effective communication. The agent technology facilitates the integration of the entire supply chain as a networked system of independent echelon. In this article, a multi agent system has been developed to simulate a multi echelon supply chain. Each entity is modeled as one agent and their coordination lead to control inventories and minimize the total cost of SC by sharing information and forecasting knowledge and using negotiation mechanism. The result showed a reasonable reduction in total cost and bullwhip effect.