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Simulating Liquidity In Value And Supply Chains

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Executive Summary

This paper provides an ontology-based set of Petri-nets for simulating the effect of business process changes on an organization's liquidity, and demonstrates that certain types of business process redesign can increase or reduce the amount of external funding that is required to prevent an organization from defaulting on its debt. This debt defaulting may lead to proliferating liquidity constraints for subsequent supply chain partners. Consequently, this paper provides a proper toolkit for assessing and mitigating the propagation of liquidity constraints in supply chains. The paper uses the accounting-based Resource-Event-Agent ontology to create workflow patterns for modeling exchanges between supply chain partners and for the value chains that represent an organization's internal processes.

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