Risk-pooling strategy, lead time, delivery reliability and inventory control decisions in a stochastic multi-objective supply chain network design

A three-echelon supply chain network design is considered and a multi-objective mixed integer non-linear problem is modeled. Risk-pooling, lead time between facilities and the concept of the reliability are used to modeling. The objectives of the model are minimization of the supply chain’s total cost and maximization the delivery reliability, which can be equal to minimize the risk of not delivering the products with regard to stochastic demand. To solve the model a heuristic hierarchical algorithm is presented. Numerical examples are considered to test and verify the Pareto front. The results show the effectiveness and efficiency of the heuristic algorithm.

[1]  Mohamad Y. Jaber,et al.  Managerial and economic impacts of reducing delivery variance in the supply chain , 2008 .

[2]  Matt Bassett,et al.  Designing optimal global supply chains at Dow AgroSciences , 2013, Ann. Oper. Res..

[3]  Ehl Emile Aarts,et al.  Statistical cooling : a general approach to combinatorial optimization problems , 1985 .

[4]  P. Miranda,et al.  INCORPORATING INVENTORY CONTROL DECISIONS INTO A STRATEGIC DISTRIBUTION NETWORK DESIGN MODEL WITH STOCHASTIC DEMAND , 2004 .

[5]  B. Suman,et al.  A survey of simulated annealing as a tool for single and multiobjective optimization , 2006, J. Oper. Res. Soc..

[6]  Joseph Geunes,et al.  Inventory and lead time planning with lead-time-sensitive demand , 2007 .

[7]  Reza Tavakkoli-Moghaddam,et al.  Reliable design of a forward/reverse logistics network under uncertainty: A robust-M/M/c queuing model , 2012 .

[8]  Armin Jabbarzadeh,et al.  Robust supply chain network design: an optimization model with real world application , 2014, Annals of Operations Research.

[9]  Reza Tavakkoli-Moghaddam,et al.  A new multi-objective stochastic model for a forward/reverse logistic network design with responsiveness and quality level , 2013 .

[10]  M. El-Sayed,et al.  A stochastic model for forward-reverse logistics network design under risk , 2010, Comput. Ind. Eng..

[11]  E. L. Ulungu,et al.  MOSA method: a tool for solving multiobjective combinatorial optimization problems , 1999 .

[12]  Jean-Philippe P. Richard,et al.  A Lagrangian relaxation approach to simultaneous strategic and tactical planning in supply chain design , 2013, Ann. Oper. Res..

[13]  Shu-Hsien Liao,et al.  A multi-objective evolutionary optimization approach for an integrated location-inventory distribution network problem under vendor-managed inventory systems , 2011, Ann. Oper. Res..

[14]  Andrew Lim,et al.  Reliable logistics networks design with facility disruptions , 2011 .

[15]  Miao-Sheng Chen,et al.  Effects of Centralization on Expected Costs in a Multi-location Newsboy Problem , 1989 .

[16]  G. D. Eppen,et al.  Determining Safety Stock in the Presence of Stochastic Lead Time and Demand , 1988 .

[17]  B. Hajek,et al.  Simulated annealing—to cool or not , 1989 .

[18]  Paolo Serafini,et al.  Simulated Annealing for Multi Objective Optimization Problems , 1994 .

[19]  Fengqi You,et al.  MINLP Model and Algorithms for Optimal Design of Large-Scale Supply Chain with Multi-Echelon Inventory and Risk Pooling Under Demand Uncertainty , 2009 .

[20]  Ada Alvarez,et al.  A bi-objective supply chain design problem with uncertainty , 2011 .

[21]  Nasrin Asgari,et al.  Multiple criteria facility location problems: A survey , 2010 .

[22]  Linda K. Nozick,et al.  Modeling supplier selection and the use of option contracts for global supply chain design , 2009, Comput. Oper. Res..

[23]  L. Puigjaner,et al.  Multiobjective supply chain design under uncertainty , 2005 .

[24]  Benita M. Beamon,et al.  Green supply chain network design with stochastic demand and carbon price , 2017, Ann. Oper. Res..

[25]  Qiang Ma,et al.  Integrated location and two-echelon inventory network design under uncertainty , 2010, Ann. Oper. Res..

[26]  Mohsen Akbarpour Shirazi,et al.  A new multi-criteria scenario-based solution approach for stochastic forward/reverse supply chain network design , 2016, Ann. Oper. Res..

[27]  Reza Zanjirani Farahani,et al.  Robust supply chain network design with service level against disruptions and demand uncertainties: A real-life case , 2013, Eur. J. Oper. Res..

[28]  G. D. Eppen.  Note---Effects of Centralization on Expected Costs in a Multi-Location Newsboy Problem , 1979 .

[29]  Jennifer Blackhurst,et al.  A model for inbound supply risk analysis , 2006, Comput. Ind..

[30]  Farnaz Barzinpour,et al.  A dual-channel network design model in a green supply chain considering pricing and transportation mode choice , 2018, J. Intell. Manuf..

[31]  Birsen Karpak,et al.  An application of visual interactive goal programming: a case in vendor selection decisions , 1999 .

[32]  Konstantinos Petridis,et al.  Optimal design of multi-echelon supply chain networks under normally distributed demand , 2015, Ann. Oper. Res..

[33]  Uday S. Karmarkar,et al.  Chapter 6 Manufacturing lead times, order release and capacity loading , 1993, Logistics of Production and Inventory.

[34]  Mir Saman Pishvaee,et al.  A robust optimization approach to closed-loop supply chain network design under uncertainty , 2011 .

[35]  Fengqi You,et al.  Optimal Design of Large-Scale Supply Chain with Multi-Echelon Inventory and Risk Pooling under Demand Uncertainty , 2009 .

[36]  C. D. Gelatt,et al.  Optimization by Simulated Annealing , 1983, Science.

[37]  Kalevi Kyläheiko,et al.  An analytic approach to production capacity allocation and supply chain design , 2002 .

[38]  Manoj Kumar Tiwari,et al.  Supply chain system design integrated with risk pooling , 2013, Comput. Ind. Eng..

[39]  Zuo-Jun Max Shen,et al.  A profit-maximizing supply chain network design model with demand choice flexibility , 2006, Oper. Res. Lett..

[40]  C-T Lin,et al.  Effects of centralization on expected profits in a multi-location newsboy problem , 1989, J. Oper. Res. Soc..

[41]  Tae-Eog Lee,et al.  A three-level supply chain network design model with risk-pooling and lead times , 2010 .