Using the max-sum algorithm for supply chain emergence in dynamic multiunit environments

Maria Chli, Michael Winsper

Research output: Contribution to journalArticlepeer-review


Supply chain formation (SCF) is the process of determining the set of participants and exchange relationships within a network with the goal of setting up a supply chain that meets some predefined social objective. Many proposed solutions for the SCF problem rely on centralized computation, which presents a single point of failure and can also lead to problems with scalability. Decentralized techniques that aid supply chain emergence offer a more robust and scalable approach by allowing participants to deliberate between themselves about the structure of the optimal supply chain. Current decentralized supply chain emergence mechanisms are only able to deal with simplistic scenarios in which goods are produced and traded in single units only and without taking into account production capacities or input-output ratios other than 1:1. In this paper, we demonstrate the performance of a graphical inference technique, max-sum loopy belief propagation (LBP), in a complex multiunit unit supply chain emergence scenario which models additional constraints such as production capacities and input-to-output ratios. We also provide results demonstrating the performance of LBP in dynamic environments, where the properties and composition of participants are altered as the algorithm is running. Our results suggest that max-sum LBP produces consistently strong solutions on a variety of network structures in a multiunit problem scenario, and that performance tends not to be affected by on-the-fly changes to the properties or composition of participants.

Original languageEnglish
Pages (from-to)422-435
Number of pages14
JournalIEEE Transactions on Systems, Man, and Cybernetics: Systems
Issue number3
Early online date16 Jan 2015
Publication statusPublished - 31 Mar 2015

Bibliographical note



  • max-sum algorithm
  • mechanism design
  • supply chain formation (SCF)


Dive into the research topics of 'Using the max-sum algorithm for supply chain emergence in dynamic multiunit environments'. Together they form a unique fingerprint.

Cite this