Incorporating risk aversion and fairness considerations into procurement and distribution decisions in a supply chain
J Tao, L Shao, Z Guan, W Ho, S Talluri
International Journal of Production Research | Taylor & Francis | Published : 2019
This paper considers a three-tier supply chain in which a manufacturer uses raw materials sourced from multiple suppliers to produce an item and sells it through multiple distributors. We develop an integrated optimisation model to study supply chain procurement and distribution decisions incorporating the manufacturer’s aversion to risk and the distributors’ concern for fairness in a climate of uncertain supply and demand. Resilient strategies, such as alternative sourcing and transshipment, are also considered when optimising the supply chain cost and service level. To solve the problem, a Monte Carlo simulation-based multi-objective stochastic programming model is built. It uses the CVaR ..View full abstract
Awarded by National Natural Science Foundation of China
This research is supported by the National Natural Science Foundation of China (Nos. 70972100 and 71372186).