Multi-Objective Decision Analysis in Strategic Supply Chain Design

Multi-Objective Decision Analysis in Strategic Supply Chain Design

Vildan Ozkir (Yıldız Technical University, Turkey)
DOI: 10.4018/978-1-5225-7299-2.ch006

Abstract

This chapter introduces the impact of competitive strategy on strategic supply chain network design decisions. The aim of increasing competitive advantage forces firms to deal with multiple conflicting objectives. Since supply chains are affiliate networks including multiple parties, accomplishing a solitary objective corresponds to an inadequate effort to maintain the sustainability of supply chain. The overall integrity and sustainability of the supply chain can be provided by satisfying the expectations of each parties. The loyalty in the supply chain is achieved by offering distinguished service among suppliers and customers rather than delivering almost same services. This can only be achieved through network design models by taking into account multiple conflicting objectives. The firm's competitive strategy defines a particular set of objectives to achieve specific goals on these performance attributes. This chapter examines the main problem domains in SC design, strategic performance measures, and recent literature on single/multiple objective models.
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2. Background

The primary purpose of the supply chain is to provide value to customers by delivering goods and services and improve customer loyalty. The way of enhancing loyalty is at least to sustain the difference between the perceived total value and perceived total cost by customer. Therefore, a set of goals is defined to assess performance of supply chain operations in terms of the net perceived value to customers. Although the most frequent objective is cost minimization in the literature, it is clear that a large number of attributes should be taken into account when customer expectations are considered simultaneously.

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