Multi-Echelon Supply Chains with Lead Times and Uncertain Demands

The aim of this work is to formulate a multi-echelon supply chain and schedule the productions, transportations, and inventories in this supply chain. This supply chain consists of a production echelon, a warehouse echelon, and a retailer echelon. Each echelon consists of multiple nodes. There are challenges of having lead times and uncertain demands in formulating and solving such a supply chain, mathematically. The lead times are incorporated in the formulation of this problem. To overcome the uncertainty of demand, two solution approaches are devised. Each solution approach utilizes two methods to obtain solutions. Solution methods are compared against Cplex solvers and their advantages are explored, computationally. To compare solution approaches, two external measures are used, which are called excess inventory and backlogging. The numerical analyses show a trade-off between solution approaches regarding these measures. In another word, it is shown that one-solution approach results in a lower backlogging, while the other results in a lower excess inventory. These solution approaches and methods provide options for decision makers, in which they can select them considering the priorities and needs.