IDEAS home Printed from https://ideas.repec.org/a/eee/transb/v45y2011i8p1162-1176.html
   My bibliography  Save this article

Build-to-order supply chain network design under supply and demand uncertainties

Author

Listed:
  • Lin, Cheng-Chang
  • Wang, Tsai-Hsin

Abstract

Supply chain disruptions are unintended, unwanted situations resulting in a negative supply chain performance. We study the supply chain network design under supply and demand uncertainty with embedded supply chain disruption mitigation strategies, postponement with downward substitution, centralized stocking and supplier sourcing base. We designed an integrated supply-side, manufacturing and demand-side operations network in such that the total expected operating cost is minimized. We modeled it in a deterministic equivalent formulation. An L-shaped decomposition with an additional decomposition step in the master problem is proposed. The computational results showed that parallel sourcing has a cost advantage against single sourcing under supply disruptions. In addition, the build-to-order (BTO) manufacturing mitigation process has its greatest impact with high variations on demands and is integrated with the component downward substitution. Lastly, the manufacturer needs to order differentiated components to cover its requirement for maximal product demand to prevent the loss of sale, even with fewer modules in stock.

Suggested Citation

  • Lin, Cheng-Chang & Wang, Tsai-Hsin, 2011. "Build-to-order supply chain network design under supply and demand uncertainties," Transportation Research Part B: Methodological, Elsevier, vol. 45(8), pages 1162-1176, September.
    • Handle: RePEc:eee:transb:v:45:y:2011:i:8:p:1162-1176
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0191261511000191
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gunasekaran, Angappa & Ngai, Eric W.T., 2009. "Modeling and analysis of build-to-order supply chains," European Journal of Operational Research, Elsevier, vol. 195(2), pages 319-334, June.
    2. Kathryn E. Stecke & Xuying Zhao, 2007. "Production and Transportation Integration for a Make-to-Order Manufacturing Company with a Commit-to-Delivery Business Mode," Manufacturing & Service Operations Management, INFORMS, vol. 9(2), pages 206-224, September.
    3. Burke, Gerard J. & Carrillo, Janice E. & Vakharia, Asoo J., 2007. "Single versus multiple supplier sourcing strategies," European Journal of Operational Research, Elsevier, vol. 182(1), pages 95-112, October.
    4. Roman Kapuscinski & Sridhar Tayur, 2007. "Reliable Due-Date Setting in a Capacitated MTO System with Two Customer Classes," Operations Research, INFORMS, vol. 55(1), pages 56-74, February.
    5. Jia Shu & Chung-Piaw Teo & Zuo-Jun Max Shen, 2005. "Stochastic Transportation-Inventory Network Design Problem," Operations Research, INFORMS, vol. 53(1), pages 48-60, February.
    6. Jing-Sheng Song & David D. Yao, 2002. "Performance Analysis and Optimization of Assemble-to-Order Systems with Random Lead Times," Operations Research, INFORMS, vol. 50(5), pages 889-903, October.
    7. Schütz, Peter & Tomasgard, Asgeir & Ahmed, Shabbir, 2009. "Supply chain design under uncertainty using sample average approximation and dual decomposition," European Journal of Operational Research, Elsevier, vol. 199(2), pages 409-419, December.
    8. Santoso, Tjendera & Ahmed, Shabbir & Goetschalckx, Marc & Shapiro, Alexander, 2005. "A stochastic programming approach for supply chain network design under uncertainty," European Journal of Operational Research, Elsevier, vol. 167(1), pages 96-115, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lin, Cheng-Chang & Wu, Yi-Chen, 2013. "Optimal pricing for build-to-order supply chain design under price-dependent stochastic demand," Transportation Research Part B: Methodological, Elsevier, vol. 56(C), pages 31-49.
    2. Wang, Xiaolei & Ouyang, Yanfeng & Yang, Hai & Bai, Yun, 2013. "Optimal biofuel supply chain design under consumption mandates with renewable identification numbers," Transportation Research Part B: Methodological, Elsevier, vol. 57(C), pages 158-171.
    3. Rezapour, Shabnam & Srinivasan, Ramakrishnan & Tew, Jeffrey & Allen, Janet K. & Mistree, Farrokh, 2018. "Correlation between strategic and operational risk mitigation strategies in supply networks," International Journal of Production Economics, Elsevier, vol. 201(C), pages 225-248.
    4. Li, Shanshan & He, Yong & Chen, Lujie, 2017. "Dynamic strategies for supply disruptions in production-inventory systems," International Journal of Production Economics, Elsevier, vol. 194(C), pages 88-101.
    5. Mohammad Ali Yamin, 2021. "Investigating the Drivers of Supply Chain Resilience in the Wake of the COVID-19 Pandemic: Empirical Evidence from an Emerging Economy," Sustainability, MDPI, vol. 13(21), pages 1-16, October.
    6. Wang, Gang & Gunasekaran, Angappa & Ngai, Eric W.T. & Papadopoulos, Thanos, 2016. "Big data analytics in logistics and supply chain management: Certain investigations for research and applications," International Journal of Production Economics, Elsevier, vol. 176(C), pages 98-110.
    7. Sheu, Jiuh-Biing & Chen, Yenming J., 2014. "Transportation and economies of scale in recycling low-value materials," Transportation Research Part B: Methodological, Elsevier, vol. 65(C), pages 65-76.
    8. Masoud Esmaeilikia & Behnam Fahimnia & Joeseph Sarkis & Kannan Govindan & Arun Kumar & John Mo, 2016. "Tactical supply chain planning models with inherent flexibility: definition and review," Annals of Operations Research, Springer, vol. 244(2), pages 407-427, September.
    9. Roba W. Salem & Mohamed Haouari, 2017. "A simulation-optimisation approach for supply chain network design under supply and demand uncertainties," International Journal of Production Research, Taylor & Francis Journals, vol. 55(7), pages 1845-1861, April.
    10. Baghalian, Atefeh & Rezapour, Shabnam & Farahani, Reza Zanjirani, 2013. "Robust supply chain network design with service level against disruptions and demand uncertainties: A real-life case," European Journal of Operational Research, Elsevier, vol. 227(1), pages 199-215.
    11. Farahani, Reza Zanjirani & Rezapour, Shabnam & Drezner, Tammy & Fallah, Samira, 2014. "Competitive supply chain network design: An overview of classifications, models, solution techniques and applications," Omega, Elsevier, vol. 45(C), pages 92-118.
    12. Cheramin, Meysam & Saha, Apurba Kumar & Cheng, Jianqiang & Paul, Sanjoy Kumar & Jin, Hongyue, 2021. "Resilient NdFeB magnet recycling under the impacts of COVID-19 pandemic: Stochastic programming and Benders decomposition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    13. Fattahi, Mohammad & Govindan, Kannan, 2018. "A multi-stage stochastic program for the sustainable design of biofuel supply chain networks under biomass supply uncertainty and disruption risk: A real-life case study," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 534-567.
    14. Qi, Mingyao & Yang, Ying & Cheng, Chun, 2023. "Location and inventory pre-positioning problem under uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 177(C).
    15. Masoud Esmaeilikia & Behnam Fahimnia & Joeseph Sarkis & Kannan Govindan & Arun Kumar & John Mo, 2016. "A tactical supply chain planning model with multiple flexibility options: an empirical evaluation," Annals of Operations Research, Springer, vol. 244(2), pages 429-454, September.
    16. Jahani, Hamed & Abbasi, Babak & Sheu, Jiuh-Biing & Klibi, Walid, 2024. "Supply chain network design with financial considerations: A comprehensive review," European Journal of Operational Research, Elsevier, vol. 312(3), pages 799-839.
    17. Mingqiang Yin & Min Huang & Xiaohu Qian & Dazhi Wang & Xingwei Wang & Loo Hay Lee, 2023. "Fourth-party logistics network design with service time constraint under stochastic demand," Journal of Intelligent Manufacturing, Springer, vol. 34(3), pages 1203-1227, March.
    18. Khouloud Dorgham & Issam Nouaouri & Jean-Christophe Nicolas & Gilles Goncalves, 2022. "Collaborative hospital supply chain network design problem under uncertainty," Operational Research, Springer, vol. 22(5), pages 4607-4640, November.
    19. Jahani, Hamed & Abbasi, Babak & Alavifard, Farzad & Talluri, Srinivas, 2018. "Supply chain network redesign with demand and price uncertainty," International Journal of Production Economics, Elsevier, vol. 205(C), pages 287-312.
    20. Cagri Gurbuz, Mustafa & Yurt, Oznur & Ozdemir, Sena & Sena, Vania & Yu, Wantao, 2023. "Global supply chains risks and COVID-19: Supply chain structure as a mitigating strategy for small and medium-sized enterprises," Journal of Business Research, Elsevier, vol. 155(PB).
    21. Aldrighetti, Riccardo & Battini, Daria & Ivanov, Dmitry & Zennaro, Ilenia, 2021. "Costs of resilience and disruptions in supply chain network design models: A review and future research directions," International Journal of Production Economics, Elsevier, vol. 235(C).
    22. Rezapour, Shabnam & Farahani, Reza Zanjirani & Pourakbar, Morteza, 2017. "Resilient supply chain network design under competition: A case study," European Journal of Operational Research, Elsevier, vol. 259(3), pages 1017-1035.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lin, Cheng-Chang & Wu, Yi-Chen, 2013. "Optimal pricing for build-to-order supply chain design under price-dependent stochastic demand," Transportation Research Part B: Methodological, Elsevier, vol. 56(C), pages 31-49.
    2. Gunasekaran, Angappa & Ngai, Eric W.T., 2009. "Modeling and analysis of build-to-order supply chains," European Journal of Operational Research, Elsevier, vol. 195(2), pages 319-334, June.
    3. Farahani, Reza Zanjirani & Rezapour, Shabnam & Drezner, Tammy & Fallah, Samira, 2014. "Competitive supply chain network design: An overview of classifications, models, solution techniques and applications," Omega, Elsevier, vol. 45(C), pages 92-118.
    4. Baghalian, Atefeh & Rezapour, Shabnam & Farahani, Reza Zanjirani, 2013. "Robust supply chain network design with service level against disruptions and demand uncertainties: A real-life case," European Journal of Operational Research, Elsevier, vol. 227(1), pages 199-215.
    5. Quddus, Md Abdul & Shahvari, Omid & Marufuzzaman, Mohammad & Ekşioğlu, Sandra D. & Castillo-Villar, Krystel K., 2021. "Designing a reliable electric vehicle charging station expansion under uncertainty," International Journal of Production Economics, Elsevier, vol. 236(C).
    6. Emelogu, Adindu & Chowdhury, Sudipta & Marufuzzaman, Mohammad & Bian, Linkan & Eksioglu, Burak, 2016. "An enhanced sample average approximation method for stochastic optimization," International Journal of Production Economics, Elsevier, vol. 182(C), pages 230-252.
    7. Rezapour, Shabnam & Allen, Janet K. & Mistree, Farrokh, 2015. "Uncertainty propagation in a supply chain or supply network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 73(C), pages 185-206.
    8. Roba W. Salem & Mohamed Haouari, 2017. "A simulation-optimisation approach for supply chain network design under supply and demand uncertainties," International Journal of Production Research, Taylor & Francis Journals, vol. 55(7), pages 1845-1861, April.
    9. Mingqiang Yin & Min Huang & Xiaohu Qian & Dazhi Wang & Xingwei Wang & Loo Hay Lee, 2023. "Fourth-party logistics network design with service time constraint under stochastic demand," Journal of Intelligent Manufacturing, Springer, vol. 34(3), pages 1203-1227, March.
    10. Iman Kazemian & Samin Aref, 2016. "Multi-echelon Supply Chain Flexibility Enhancement Through Detecting Bottlenecks," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 17(4), pages 357-372, December.
    11. M. Melo & S. Nickel & F. Saldanha-da-Gama, 2014. "An efficient heuristic approach for a multi-period logistics network redesign problem," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 22(1), pages 80-108, April.
    12. Aydin, Nezir & Murat, Alper, 2013. "A swarm intelligence based sample average approximation algorithm for the capacitated reliable facility location problem," International Journal of Production Economics, Elsevier, vol. 145(1), pages 173-183.
    13. Sahling, Florian & Kayser, Ariane, 2016. "Strategic supply network planning with vendor selection under consideration of risk and demand uncertainty," Omega, Elsevier, vol. 59(PB), pages 201-214.
    14. Fattahi, Mohammad & Govindan, Kannan & Keyvanshokooh, Esmaeil, 2017. "Responsive and resilient supply chain network design under operational and disruption risks with delivery lead-time sensitive customers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 176-200.
    15. Ben Mohamed, Imen & Klibi, Walid & Sadykov, Ruslan & Şen, Halil & Vanderbeck, François, 2023. "The two-echelon stochastic multi-period capacitated location-routing problem," European Journal of Operational Research, Elsevier, vol. 306(2), pages 645-667.
    16. Snoeck, André & Udenio, Maximiliano & Fransoo, Jan C., 2019. "A stochastic program to evaluate disruption mitigation investments in the supply chain," European Journal of Operational Research, Elsevier, vol. 274(2), pages 516-530.
    17. Fattahi, Mohammad & Mosadegh, Hadi & Hasani, Aliakbar, 2021. "Sustainable planning in mining supply chains with renewable energy integration: A real-life case study," Resources Policy, Elsevier, vol. 74(C).
    18. Mohammad Marufuzzaman & Farjana Nur & Amy E. Bednar & Mark Cowan, 2020. "Enhancing Benders decomposition algorithm to solve a combat logistics problem," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 42(1), pages 161-198, March.
    19. Meng, Qiang & Wang, Tingsong & Wang, Shuaian, 2012. "Short-term liner ship fleet planning with container transshipment and uncertain container shipment demand," European Journal of Operational Research, Elsevier, vol. 223(1), pages 96-105.
    20. Nezamoddini, Nasim & Gholami, Amirhosein & Aqlan, Faisal, 2020. "A risk-based optimization framework for integrated supply chains using genetic algorithm and artificial neural networks," International Journal of Production Economics, Elsevier, vol. 225(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:45:y:2011:i:8:p:1162-1176. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.