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Opportunistic supply chain formation from qualified partners for a new market demand

Author

Listed:
  • S S Chauhan

    (INRIA-SAGEP, Ile du Saulcy - 57045)

  • J-M Proth

    (INRIA-SAGEP, Ile du Saulcy - 57045)

  • A M Sarmiento

    (University at Buffalo (SUNY))

  • R Nagi

    (University at Buffalo (SUNY))

Abstract

This paper addresses the problem of short-term supply chain design using the idle capacities of qualified partners in order to seize a new market opportunity. The new market opportunity is characterized by a deterministic forecast over a planning horizon. The production–distribution process is assumed to be organized in stages or echelons, and each echelon may have several qualified partners willing to participate. Partners within the echelon may differ in idle production capacity, operational cost, storage cost, etc, and we assume that idle capacity may be different from one period to another period. The objective is to design a supply chain by selecting one partner from each echelon to meet the forecasted demand without backlog and best possible production and logistics costs over the given planning horizon. The overall problem is formulated as a large mixed integer linear programming problem. We develop a decomposition-based solution approach that is capable of overcoming the complexity and dimensionality associated with the problem. Numerical results are presented to support the effectiveness of this approach.

Suggested Citation

  • S S Chauhan & J-M Proth & A M Sarmiento & R Nagi, 2006. "Opportunistic supply chain formation from qualified partners for a new market demand," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(9), pages 1089-1099, September.
    • Handle: RePEc:pal:jorsoc:v:57:y:2006:i:9:d:10.1057_palgrave.jors.2602075
    DOI: 10.1057/palgrave.jors.2602075
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    References listed on IDEAS

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    Cited by:

    1. Ivanov, Dmitry & Sokolov, Boris & Kaeschel, Joachim, 2010. "A multi-structural framework for adaptive supply chain planning and operations control with structure dynamics considerations," European Journal of Operational Research, Elsevier, vol. 200(2), pages 409-420, January.
    2. Pan, Feng & Nagi, Rakesh, 2013. "Multi-echelon supply chain network design in agile manufacturing," Omega, Elsevier, vol. 41(6), pages 969-983.
    3. Hêris Golpîra, 2017. "Robust bi-level optimization for an opportunistic supply chain network design problem in an uncertain and risky environment," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 27(1), pages 21-41.

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