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A combined approach for modeling multi-echelon multi-period decentralized supply chain

Author

Listed:
  • Marjia Haque

    (University of New South Wales)

  • Sanjoy Kumar Paul

    (University of Technology Sydney)

  • Ruhul Sarker

    (University of New South Wales)

  • Daryl Essam

    (University of New South Wales)

Abstract

In this paper, a multi-echelon, multi-period, decentralized supply chain (SC) with a single manufacturer, single distributor and single retailer is considered. For this setting, a two-phase planning approach combining centralized and decentralized decision-making processes is proposed, in which the first-phase planning is a coordinated centralized controlled, and the second-phase planning is viewed as independent decentralized decision-making for individual entities. This research focuses on the independence and equally powerful behavior of the individual entities with the aim of achieving the maximum profit for each stage. A mathematical model for total SC coordination as a first-phase planning problem and separate ones for each of the independent members with their individual objectives and constraints as second-phase planning problems are developed. We introduce a new solution approach using a goal programming technique in which a target or goal value is set for each independent decision problem to ensure that it obtains a near value for its individual optimum profit, with a numerical analysis presented to explain the results. Moreover, the proposed two-phase model is compared with a single-phase approach in which all stages are considered dependent on each other as parts of a centralized SC. The results prove that the combined two-phase planning method for a decentralized SC network is more realistic and effective than a traditional single-phase one.

Suggested Citation

  • Marjia Haque & Sanjoy Kumar Paul & Ruhul Sarker & Daryl Essam, 2022. "A combined approach for modeling multi-echelon multi-period decentralized supply chain," Annals of Operations Research, Springer, vol. 315(2), pages 1665-1702, August.
    • Handle: RePEc:spr:annopr:v:315:y:2022:i:2:d:10.1007_s10479-021-04121-0
    DOI: 10.1007/s10479-021-04121-0
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    References listed on IDEAS

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