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Multi-objective stochastic supply chain modeling to evaluate tradeoffs between profit and quality

Author

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  • Franca, Rodrigo B.
  • Jones, Erick C.
  • Richards, Casey N.
  • Carlson, Jonathan P.

Abstract

Many companies struggle with justifying the cost of quality within their supply chain. Outsourcing suppliers to countries such as China has become popular in recent years due to the fact it appears to be more profitable. These outsource decisions do not effectively determine the impacts of quality defects. In this paper we demonstrate a method for evaluating the systemic supply chain risk of poor quality. We introduce a multi-objective stochastic model that uses Six Sigma measures to evaluate financial risk. Results from modeling suggest quality, profit, and customer satisfaction can be evaluated.

Suggested Citation

  • Franca, Rodrigo B. & Jones, Erick C. & Richards, Casey N. & Carlson, Jonathan P., 2010. "Multi-objective stochastic supply chain modeling to evaluate tradeoffs between profit and quality," International Journal of Production Economics, Elsevier, vol. 127(2), pages 292-299, October.
    • Handle: RePEc:eee:proeco:v:127:y:2010:i:2:p:292-299
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    References listed on IDEAS

    as
    1. Azaron, A. & Brown, K.N. & Tarim, S.A. & Modarres, M., 2008. "A multi-objective stochastic programming approach for supply chain design considering risk," International Journal of Production Economics, Elsevier, vol. 116(1), pages 129-138, November.
    2. Meixell, Mary J. & Gargeya, Vidyaranya B., 2005. "Global supply chain design: A literature review and critique," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(6), pages 531-550, November.
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