Chaotic Behavior In A Simple Inventory System

The charts below show on-hand balance for six part numbers in an actual factory. Note the seemingly random pattern.

The inventory system was a simple Re-Order Point system with steady demand. There should be some semblance of the classic saw-tooth pattern. Moreover, the demand for each of these products was roughly proportional over time—for every ten 4M24's sold there should have been two 4M90's sold. This proportional demand is also not reflected in the inventory.

While there were external random factors there is also good reason to believe that the system itself was inherently unstable and/or chaotic.

Stabilization Series

Stabilizing Production Scheduling

Feedback System Basics
Instability In Feedback Systems
Complexity
Chaos In Scheduling
Using The Knowledge