The Aero-engine Value Chain under Future Business Environments: Using Agent-based Simulation to Understand Dynamic Behaviour

Division of Operations Management, Nottingham University Business School Jubilee Campus, NG8 1BB, Nottingham, United Kingdom Email: [email protected] Abstract: Agent-based modelling is gaining popularity for understanding the behaviour of complex systems involving interactions of many players or agents. In this paper an agent-based simulation modelling technique is applied to understand the long term implications of strategy decisions for an aerospace value chain. The industry has unique elements including new business models, high levels of collaboration, long product lifecycles and long periods before positive paybacks are realised. Forecasting market conditions over this long term lifespan is inherently problematic and adds further complexity when devising a strategy. The model described includes all the major players and entities in the value chain and their interactions. Illustrative results are presented to demonstrate how the approach can be used to evaluate strategy and policy decisions and their operational implications over the long term.