Robust bi-level optimization for an opportunistic supply chain network design problem in an uncertain and risky environment

• Authors: GOLPÎRA Hêriş
• Languages of publication: EN

Abstracts

EN

This paper introduces the problem of designing a single-product supply chain network in an agile manufacturing setting under a vendor managed inventory (VMI) strategy to seize a new market oppor-tunity. The problem addresses the level of risk aversion of the retailer when dealing with the uncertainty of market related information through a conditional value at risk (CVaR) approach. This approach leads to a bilevel programming problem. The Karush–Kuhn–Tucker (KKT) conditions are employed to trans-form the model into a single-level, mixed-integer linear programming problem by considering some relaxations. Since realizations of imprecisely known parameters are the only information available, a data-driven approach is employed as a suitable, more practical, methodology of avoiding distribu-tional assumptions. Finally, the effectiveness of the proposed model is demonstrated through a numer-ical example.

Keywords

EN

supply chain management; production-distribution planning; conditional value at risk; bilevel programming; robust optimization; KKT conditions

• Publisher: Politechnika Wrocławska. Oficyna Wydawnicza Politechniki Wrocławskiej
• Journal: Operations Research and Decisions
• Year: 2017
• Volume: 27
• Issue: 1
• Pages: 21-41

Contributors

author

GOLPÎRA Hêriş

• Department of Industrial Engineering, Snanadaj Branch, Islamic Azad University, Sanandaj, Iran

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Identifiers

DOI

10.5277/ord170102