Digital control of an analog marcketting model

Conventional methods of inventory control in most retail enterprises emphasize minimization of cost while maintaining an appropriate degree of service to the clientele. This is done without regard to the effects produced on the distributor who is supplying the goods or the factory which is producing them. Such policies characteristically result in the amplification of a small disturbance (small change in sales volume) at the retailer level into a large disturbance at the factory level producing large cyclic swings in factory production, inventory, and operating efficiency.