Supply Chain Network Design in Uncertain Environment: A Review and Classification of Related Models

Supply Chain Network Design in Uncertain Environment: A Review and Classification of Related Models

Gholam Reza Nasiri (Amirkabir University of Technology, Iran & Institute for Trade Studies and Research, Iran) and Fariborz Jolai (University of Tehran, Iran)
Copyright: © 2018 |Pages: 21
DOI: 10.4018/978-1-5225-5091-4.ch010
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Abstract

Dynamic environment imposes such conditions that make it necessary for companies to consider sources of uncertainty in designing core business processes and optimizing supply chain operations. Efficient management of a supply system requires an integrated approach towards various operational functions and related source of uncertainties. Uncertain conditions in supply network design problem such as market demands, delivery time, and facility capacity are considered and incorporated by many studies at the mathematical programming formulations as well. In this chapter, extensive review of existing SCND literature, brief overview and classification on uncertainty sources, useful strategies to deal uncertainties, model formulation with uncertain/stochastic parameters, efficient developed solution methodologies, and improvement adjustment mechanisms are discussed. Lastly, some directions for further research in this area are suggested.
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Scnd Literature Review

The SCND is one of the strategic issues that required to be optimized in the SCM. This problem consists of selecting best sites for establishing and operating physical facilities (e.g., plants, warehouses, and distribution centers), assigning customers to the opened facilities, and interconnecting facilities via flow assignment decisions. The facility location problem (FLP) consists of choosing the best locations of desired facilities in such a way that all clients or partial of them can be served, at least by one operating facility to obtain pre-defined goals (minimizing total costs or maximizing total revenues). On the other hand, reverse logistics (also called recovery chain) planning for moving and flow of surplus or unwanted materials, and returned products to reuse or rework is also a well-known area in the SCND.

However, the dynamic facility location problem (DFLP) which is a specific version of the FLP considers the location of facilities and assignment pattern of customer during a planning horizon. According to fluctuation in pre-existed conditions in each period of the planning horizon, the location of facilities and assignment of each client are not fixed and may be changed.

Features of SCND mathematical formulation can be categorized into five stages (Figure1): problem definition and assumptions, objective function (contains the metrics that should be optimized), solution approach to solve the formulated model, and expected model’s outputs.

Figure 1.

Components of SCND formulation

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