In this paper, we propose to use distributed model predictive control for supply chain optimization. In particular, we focus on inventory management in supply chains. We use cooperative model predictive control, in which each agent makes their local decisions by optimizing the overall supply chain objective. Motivated by recent results in Stewart, Wright, and Rawlings (2011), we develop a new cooperative MPC algorithm that is applicable to any stabilizable system, and in particular to supply chain models. We illustrate cooperative MPC for a two node supply chain example and compare its performance and properties with other classical distributed operating policies. (C) 2012 Elsevier Ltd. All rights reserved.