Chaos theory in operations research

The purpose of this paper is to illustrate the potential importance of non-linear dynamical systems theory in Operational Research OR. After a brief introduction to some basic concepts, the paper studies an advertising diffusion model to exemplify the composition of chaos and optimally in dynamic programming. It turns out that economies of scale may imply period three cycle and consequently topological chaos. Furthermore, an outlook to further potential applications of non-linear dynamical systems in OR/MS queueing systems are briefly discussed whose random coding fluctuations are endogenously generated in a pure deterministic framework. Among the various paradigms favouring complex behaviour are dynamic strategic interactions, slow-fast systems, and cellular automata.