Modelling and simulation of production-marketing systems

Three aspects of complexity in a Production-Marketing System are
identified, namely the Model, Decision-Making and Behavioural complexities.
Control theoretic and other techniques are reviewed in the
context of their contribution to the resolution of these complexities
and the modelling and simulation of the PMS is also viewed in this light.
Several analytical models of a consumer-durable marketing system are
developed, reflecting various assumptions of market conditions ranging
from the single-product constant-decision marketing system to the multiproduct
variable-decision marketing system, the latter explicitly
accounting for price, advertizing, distribution and quality decisions for
each product, repeat purchase dynamics and the tastes, income and population
of consumers. A production system model is also developed involving
a multiple final product, multi-stage production process, permitting the
backlogging of demand, variation of production rate by variation in workforce
levels and overtime and subcontracting of manufacture of intermediate
products.
Computer simulatiors of the marketing system based on the models
developed and using assumed data are carried out. An optimization routine
is used to generate the variable decisions. The variable-decision marketing
model is combined with the production model and the resulting limited
capacity PMS is simulated using assumed data.
The simulation results are presented graphically and attention drawn
to their realism. The use of the PMS simulation programme as a nucleus
for a comprehensive PMS simulation and control package is commented upon.