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

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

Journal Title: Operations Research and Decisions - Year 2017, Vol 27, Issue 1

Abstract

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.

Authors and Affiliations

Hêriş GOLPÎRA

Keywords

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EP ID EP323641
DOI -
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