Download Supply Chain Design under Uncertainty

Supply Chain Design under Uncertainty
Amir Azaron
School of Science and Engineering
FYRIRLESTRAMARAÞON HR 2011 | RU LECTURE MARATHON 2011
Supply Chain
• A Supply Chain is a network of suppliers,
manufacturing plants, warehouses and distribution
channels.
• It is organized to acquire raw materials, convert
these raw materials to finished products and
distribute these products to customers.
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Supply Chain Network
Supplier
Warehouse
Consumer
Wholesaler
Manufacturer
Warehouse
Consumer
Manufacturer
Supplier
Warehouse
Consumer
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Supply Chain Design Problem
• Decision Variables
- Strategic decisions are dealing with the configuration of
the supply chain or locations of facilities
- Tactical decisions are dealing with the amount of
products to be produced and flows of materials.
• Constraints
- Flows (min on demand nodes, flow conservation on
intermediate nodes, max on supply nodes).
• SCD Problem Objective
- Simultaneously make Strategic and Tactical decisions
to minimize the total costs.
We should also make decision in an environment where
most model parameters such as demands, capacities,
etc., are uncertain.
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L
Min

c y   pl qlT xl  hlT z l  f lT el
T

[Expected Total Cost]
l 1
 T

T
T
T
T
T
pl  ql xl  hl zl  f l el   pl ql xl  hl zl  f l el 

l 1
l 1


L
Min
L


2
[Variance]
L
Min
pu
l 1
[Financial Risk]
l l
s.t.
Bxl=0
l=1,…,L
Dxl+zl  dl l=1,…,L
Sxl  sl
l=1,…,L
Rxl  My+el
l=1,…,L
l=1,…,L
el  Oy
[Flow Conservation]
[Meeting Demand]
[Supply Limit]
[Capacity Constraint]
[Capacity Expansion Limit]
c T y  qlT xl  hlT z l  f lT el    Vul
P
y  Y  {0,1} , u  U  {0,1}L
A  K L
x  R
C  K L
, z  R
l=1,…,L [Rel. to Financial Risk]
[Binary Variables]
P L
, e  R
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[Continuous Variables]