Integrated selection of suppliers and scheduling of customer orders in the presence of supply chain disruption risks

This paper presents a new stochastic mixed integer programming approach to integrated supplier selection, order quantity allocation and customer order scheduling in the presence of supply chain disruption risks. Given a set of customer orders for products, the decision maker needs to decide from which supplier to purchase parts required to complete the orders, how to allocate the demand for parts among the selected suppliers, and how to schedule the customer orders over the planning horizon to minimize total cost of ordering and purchasing of parts plus penalty cost of delayed and unfulfilled customer orders and to mitigate the impact of disruption risks. The risk-neutral and risk-averse solutions that optimize, respectively average and worst-case performance of a supply chain are compared for both single and multiple sourcing strategy. Numerical examples are presented and computational results are reported.

[1]  Y. J. Lin,et al.  Supplier selection using analytic network process and data envelopment analysis , 2012 .

[2]  Alexandre Dolgui,et al.  Generalized newsboy model to compute the optimal planned lead times in assembly systems , 2002 .

[3]  Tadeusz Sawik,et al.  Selection of supply portfolio under disruption risks , 2011 .

[4]  Amy Z. Zeng,et al.  Single versus multiple sourcing in the presence of risks , 2006, J. Oper. Res. Soc..

[5]  Qinan Wang,et al.  Coordination mechanisms of supply chain systems , 2007, Eur. J. Oper. Res..

[6]  Arshinder,et al.  Supply chain coordination: Perspectives, empirical studies and research directions , 2008 .

[7]  T. Sawik Selection of resilient supply portfolio under disruption risks , 2013 .

[8]  Young Won Park,et al.  Supply chain lessons from the catastrophic natural disaster in Japan , 2013 .

[9]  Tadeusz Sawik,et al.  Monolithic versus hierarchical approach to integrated scheduling in a supply chain , 2009 .

[10]  Gang Wang,et al.  Polynomial-time solvable cases of the capacitated multi-echelon shipping network scheduling problem with delivery deadlines , 2012 .

[11]  Alexandre Dolgui,et al.  Supply Chain Engineering , 2010 .

[12]  J. Proth,et al.  Supply Chain Engineering : Useful Methods and Techniques , 2009 .

[13]  Alessandro Perego,et al.  How to choose mitigation measures for supply chain risks , 2014 .

[14]  Bartosz Sawik Bi-Criteria Portfolio Optimization Models with Percentile and Symmetric Risk Measures by Mathematical Programming , 2012 .

[15]  S. Deshmukh,et al.  Strategic supplier selection: some emerging issues and challenges , 2009 .

[16]  P. Parthiban,et al.  Vendor selection problem: a multi-criteria approach based on strategic decisions , 2013 .

[17]  Alexandre Dolgui,et al.  Optimal supply planning in MRP environments for assembly systems with random component procurement times , 2008 .

[18]  George L. Vairaktarakis,et al.  Integrated Scheduling of Production and Distribution Operations , 2005, Manag. Sci..

[19]  Linda Hendry,et al.  Supply-chain uncertainty: a review and theoretical foundation for future research , 2012 .

[20]  Najla Aissaoui,et al.  Supplier selection and order lot sizing modeling: A review , 2007, Comput. Oper. Res..

[21]  Amy Z. Zeng,et al.  How many suppliers are best? A decision-analysis approach , 2004 .

[22]  Fuqiang Zhang Supply Chain Coordination , 2011 .

[23]  Zhi-Long Chen,et al.  Supply Chain Scheduling: Conflict and Cooperation in Assembly Systems , 2007, Oper. Res..

[24]  Stan Uryasev,et al.  Conditional value-at-risk: optimization algorithms and applications , 2000, Proceedings of the IEEE/IAFE/INFORMS 2000 Conference on Computational Intelligence for Financial Engineering (CIFEr) (Cat. No.00TH8520).

[25]  Yasemin Merzifonluoglu,et al.  Newsvendor problem with multiple unreliable suppliers , 2014 .

[26]  Sergey Sarykalin,et al.  Value-at-Risk vs. Conditional Value-at-Risk in Risk Management and Optimization , 2008 .

[27]  A. Ruiz-Torres,et al.  The optimal number of suppliers considering the costs of individual supplier failures , 2007 .

[28]  Amy Z. Zeng,et al.  Single or dual sourcing: decision-making in the presence of supply chain disruption risks , 2009 .

[29]  Zhi-Long Chen,et al.  Order Assignment and Scheduling in a Supply Chain , 2006, Oper. Res..

[30]  T. Sawik Joint supplier selection and scheduling of customer orders under disruption risks: Single vs. dual sourcing , 2014 .

[31]  M. Dotoli,et al.  A hierarchical model for optimal supplier selection in multiple sourcing contexts , 2012 .

[32]  Wieslaw Kubiak,et al.  Coordinating contracts in SCM : a review of methods and literature , 2010 .

[33]  Tadeusz Sawik,et al.  A lexicographic approach to bi-objective scheduling of single-period orders in make-to-order manufacturing , 2007, Eur. J. Oper. Res..

[34]  R. Rockafellar,et al.  Optimization of conditional value-at risk , 2000 .

[35]  Bartosz Sawik,et al.  Downside Risk Approach for Multi-Objective Portfolio Optimization , 2011, OR.

[36]  Tao Yang,et al.  Risk adjusted multicriteria supplier selection models with applications , 2010 .

[37]  Tadeusz Sawik,et al.  Scheduling in Supply Chains Using Mixed Integer Programming , 2011 .

[38]  Susana Relvas,et al.  Alexandre Dolgui and Jean-Marie Proth, Supply Chain Engineering - Useful Methods and Techniques , Springer-Verlag (2010) 541 pp., ISBN: 978-1-84996-016-8 , 2010, Eur. J. Oper. Res..

[39]  Amy H. I. Lee,et al.  A stochastic lot-sizing model with multi-supplier and quantity discounts , 2013 .