Modeling defaults of companies in multi-stage supply chain networks

The interest in supply chain networks and their analysis as complex systems is rapidly growing. The physical approach to the topic of production networks relies on the concept of heterogeneous interacting agents. The interaction among agents is considered as a repeated process of orders and production. The dynamics of production in the supply chain network which we observe is nonlinear due to the random failures in processes of orders and production. We introduced a modified model of a supply chain network which represents in more detail the real economic environment in which firms are operating. We focused on the influence of local processes on the global economic behavior of the system and studied how the proposed modifications change the general properties of the model. To simulate the economic environment of companies realistically, we introduced the following features to the model: evolution of a supply chain network with the reconfiguration of links, price dispersion and the dynamics of prices and costs of production.