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Robust Supply Chain Network Design by Considering Demand-Side Uncertainty and Supply-Side Disruption

[+] Author Affiliations
Shabnam Rezapour, Janet K. Allen, Theodore B. Trafalis, Farrokh Mistree

The University of Oklahoma, Norman, OK

Paper No. DETC2013-13188, pp. V03AT03A030; 18 pages
  • ASME 2013 International Design Engineering Technical Conferences and Computers and Information in Engineering Conference
  • Volume 3A: 39th Design Automation Conference
  • Portland, Oregon, USA, August 4–7, 2013
  • Conference Sponsors: Design Engineering Division, Computers and Information in Engineering Division
  • ISBN: 978-0-7918-5588-1
  • Copyright © 2013 by ASME


In this paper we propose a method that includes stochastic and robust models for designing the network structure of a three-tiered supply chain involving suppliers, manufacturers and retailers under random demands of markets and by considering disruption probabilities in the procurement facilities and connecting links of the chain. Demands of the markets are as assumed to be random variables with normal distribution and the disruption of the chain is formulated by defining different scenarios. Having substitutable facilities and extra production capacities makes it possible to overcome the negative effects of demand fluctuations and disruption of facilities. First we determine the optimal number, location and capacity of facilities in the first and third tiers and the best flow of material and product throughout the chain in a way to maximize the expected profit from the chain. Then to reduce the difference between the performances of the chain in different scenarios, we propose the ISP-Robust technique based on P-Robust technique to make the model robust. We discuss the differences and advantages of this technique in comparison to the P-Robust technique. We illustrate our method using data from the petrochemical industry.

Copyright © 2013 by ASME



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