Equilibrium Rate Analysis in Supply Chain Financial Management

Benjamin Melamed, Dale Rogers

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


This paper addresses Supply Chain Financial Management (SCFM), namely, the analysis of combined operational and financial aspects of supply chains, an important emerging topic in Supply Chain Management (SCM). It further aims to bridge the gap between practical SCM research and analytical tools for modeling and optimization purposes by illustrating how analytical and numerical methods can be used in combination with simple financial and accounting concepts to obtain financial/accounting metrics for supply chains. To this end we introduce Equilibrium Rate Analysis (ERA) as a modeling approach to stochastic systems and their performance metrics, including the domain of SCFM. ERA posits stochastic equilibrium as the mathematical setting of models, and utilizes rate metrics instead of cumulative (time-additive) ones. This approach brings about major conceptual and computational simplifications, which facilitate evaluation and optimization of SCFM metrics. The paper explains in broad outline how to formulate ERA-based models and illustrates derivation of SCFM metrics, focusing on analytical and numerical methodologies in Markovian models.

Original languageEnglish (US)
Pages (from-to)52-68
Number of pages17
JournalSupply Chain Forum
Issue number3
StatePublished - Jan 1 2015


  • Cash Conversion Model
  • Cash Conversion Process
  • Cash Conversion System
  • Equilibrium Rate Analysis (ERA)
  • Make-to-Stock Inventory
  • Markovian Models
  • Supply Chain Financial Management (SCFM)
  • Supply Chain Management (SCM)

ASJC Scopus subject areas

  • Business and International Management
  • Management Science and Operations Research
  • Management of Technology and Innovation


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