Design of Multi-echelon Supply Chain Networks under Demand Uncertainty

We consider the design of multiproduct, multi-echelon supply chain networks. The networks comprise a number of manufacturing sites at fixed locations, a number of warehouses and distribution centers of unknown locations (to be selected from a set of potential locations), and finally a number of customer zones at fixed locations. The system is modeled mathematically as a mixed-integer linear programming optimization problem. The decisions to be determined include the number, location, and capacity of warehouses and distribution centers to be set up, the transportation links that need to be established in the network, and the flows and production rates of materials. The objective is the minimization of the total annualized cost of the network, taking into account both infrastructure and operating costs. A case study illustrates the applicability of such an integrated approach for production and distribution systems with or without product demand uncertainty.

[1]  A. M. Geoffrion,et al.  Multicommodity Distribution System Design by Benders Decomposition , 1974 .

[2]  G. O. Wesolowsky,et al.  The Multiperiod Location-Allocation Problem with Relocation of Facilities , 1975 .

[3]  John H. Vanston,et al.  Alternate scenario planning , 1977 .

[4]  Jack F. Williams.  Heuristic Techniques for Simultaneous Scheduling of Production and Distribution in Multi-Echelon Structures: Theory and Empirical Comparisons , 1981 .

[5]  J. Williams,et al.  A Hybrid Algorithm for Simultaneous Scheduling of Production and Distribution in Multi-Echelon Structures , 1983 .

[6]  François V. Louveaux,et al.  Multistage stochastic programs with block-separable recourse , 1986 .

[7]  John M. Lucas,et al.  PLANETS: A Modeling System for Business Planning , 1987 .

[8]  Gerald G. Brown,et al.  Design and operation of a multicommodity production/distribution system using primal goal decomposition , 1987 .

[9]  Hau L. Lee,et al.  Strategic Analysis of Integrated Production-Distribution Systems: Models and Methods , 1988, Oper. Res..

[10]  Kazuyoshi Ishii,et al.  Integrated production, inventory and distribution systems , 1988 .

[11]  Fereidoon P. Sioshansi,et al.  Scenario Planning at Southern California Edison , 1989 .

[12]  Hokey Min,et al.  Multiobjective analysis of facility location decisions , 1990 .

[13]  Paul H. Zipkin,et al.  Evaluation of one-for-one replenishment policies for multiechelon inventory systems , 1991 .

[14]  Ignacio E. Grossmann,et al.  An outer-approximation method for multiperiod design optimization , 1992 .

[15]  Pankaj Chandra,et al.  A Dynamic Distribution Model with Warehouse and Customer Replenishment Requirements , 1993 .

[16]  Francis J. Vasko,et al.  Consolidating Product Sizes to Minimize Inventory Levels for a Multi-Stage Production and Distribution System , 1993 .

[17]  David F. Pyke,et al.  Performance characteristics of stochastic integrated production-distribution systems , 1993 .

[18]  Hau L. Lee,et al.  Material Management in Decentralized Supply Chains , 1993, Oper. Res..

[19]  David F. Pyke,et al.  Multiproduct integrated production—distribution systems☆ , 1994 .

[20]  John Pooley,et al.  Integrated Production and Distribution Facility Planning at Ault Foods , 1994 .

[21]  Marshall L. Fisher,et al.  Coordination of production and distribution planning , 1994 .

[22]  R. Sridharan.  The capacitated plant location problem , 1995 .

[23]  Robert J. Vanderbei,et al.  Robust Optimization of Large-Scale Systems , 1995, Oper. Res..

[24]  Terry P. Harrison,et al.  Global Supply Chain Management at Digital Equipment Corporation , 1995 .

[25]  Vasilios T. Voudouris,et al.  Mathematical programming techniques to debottleneck the supply chain of fine chemical industries , 1996 .

[26]  Hasan Pirkul,et al.  Production, Transportation, and Distribution Planning in a Multi-Commodity Tri-Echelon System , 1996, Transp. Sci..

[27]  Stavros A. Zenios,et al.  Solving multistage stochastic network programs on massively parallel computers , 1996, Math. Program..

[28]  Warren B. Powell,et al.  Models and Algorithms for Distribution Problems with Uncertain Demands , 1996, Transp. Sci..

[29]  R. Schultz,et al.  Two-stage stochastic integer programming : a survey , 1996 .

[30]  J. Mulvey.  Generating Scenarios for the Towers Perrin Investment System , 1996 .

[31]  Hau L. Lee,et al.  Information distortion in a supply chain: the bullwhip effect , 1997 .

[32]  J. Mulvey,et al.  Strategic financial risk management and operations research , 1997 .

[33]  Marc Goetschalckx,et al.  Strategic production-distribution models: A critical review with emphasis on global supply chain models , 1997 .

[34]  Kumar Bhaskaran,et al.  Manufacturing supply chain modelling and reengineering , 1997 .

[35]  Mark S. Daskin,et al.  Strategic facility location: A review , 1998, Eur. J. Oper. Res..

[36]  B. Beamon.  Supply chain design and analysis:: Models and methods , 1998 .

[37]  Hasan Pirkul,et al.  A multi-commodity, multi-plant, capacitated facility location problem: formulation and efficient heuristic solution , 1998, Comput. Oper. Res..

[38]  Zubair M. Mohamed.  An integrated production-distribution model for a multi-national company operating under varying exchange rates , 1999 .

[39]  K S Hindi,et al.  Efficient solution of large scale, single-source, capacitated plant location problems , 1999, J. Oper. Res. Soc..

[40]  Jochen Krautter.  Inventory theory: New perspectives for corporate management , 1999 .

[41]  L. Jenkins.  Selecting scenarios for environmental disaster planning , 2000, Eur. J. Oper. Res..

[42]  Hans-Jürgen Zimmermann,et al.  An application-oriented view of modeling uncertainty , 2000, Eur. J. Oper. Res..

[43]  Gautam Mitra,et al.  Computational solution of capacity planning models under uncertainty , 2000, Parallel Comput..

[44]  T. Davis.  Effective supply chain management , 2020, Strategic Direction.