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A optimization-based distributed model predictive control principles is applied to dynamic supply chain network. The optimisation-based control scheme aims at adjusting the decision variables in the supply chain to satisfy the customer orders with the least operating cost over a specified rolling time horizon using a detailed difference model of the system. The model proves to be very useful in maintaining an inventory level that is just enough to satisfy customer demand. A move suppression term that penalizes the rate of change in the transported quantities through the network increases the robustness of the control system. Dedicated feedback controllers are utilised to maintain product inventory at all nodes of the supply chain network within pre-specified target levels that are subsequently embedded within the optimisation-based control framework. Simulated results exhibit good dynamic performance under both stochastic and deterministic demand variations.