A Stochastic Approach to Product-Driven Supply Chain Design

Supply chain is an alliance of independent business processes, such as supplier, manufacturing, and distribution processes that perform the critical functions in the order fulfillment process. However, the discussions in marketing and logistic literature universally conclude that it would be desirable to determine the life cycle of products in the firm, as they have a great impact on appropriate supply chain design. Designing a supply chain effectively is a complex and challenging task, due to the increasing outsourcing, globalization of businesses, continuous advances in information technology, and product life cycle uncertainty. Indeed, uncertainty is one of the characteristics of the product life cycle. In particular, the strategic design of the supply chain has to take uncertain information into account. This chapter presents a two-phase mathematical programming approach for effective supply chain design with product life cycle uncertainty considerations.

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