Developing lean and responsive supply chains : a robust model for alternative risk mitigation strategies in supply chain designs

Mohammaddust, Faeghe, Rezapour, Shabnam, Zanjirani Farahani, Reza, Mofidfar, Mohammad and Hill, Alex (2017) Developing lean and responsive supply chains : a robust model for alternative risk mitigation strategies in supply chain designs. International Journal of Production Economics, 183(C), pp. 632-653. ISSN (print) 0925-5273

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This paper investigates how organization should design their supply chains (SCs) and use risk mitigation strategies to meet different performance objectives. To do this, we develop two mixed integer nonlinear (MINL) lean and responsive models for a four-tier SC to understand these four strategies: i) holding back-up emergency stocks at the DCs, ii) holding back-up emergency stock for transshipment to all DCs at a strategic DC (for risk pooling in the SC), iii) reserving excess capacity in the facilities, and iv) using other facilities in the SC’s network to back-up the primary facilities. A new method for designing the network is developed which works based on the definition of path to cover all possible disturbances. To solve the two proposed MINL models, a linear regression approximation is suggested to linearize the models; this technique works based on a piecewise linear transformation. The efficiency of the solution technique is tested for two prevalent distribution functions. We then explore how these models operate using empirical data from an automotive SC. This enables us to develop a more comprehensive risk mitigation framework than previous studies and show how it can be used to determine the optimal SC design and risk mitigation strategies given the uncertainties faced by practitioners and the performance objectives they wish to meet.

Item Type: Article
Research Area: Applied mathematics
Business and management studies
Statistics and operational research
Faculty, School or Research Centre: Faculty of Business and Law (until 2017)
Faculty of Business and Law (until 2017) > Kingston Business School (Department of Management) (from August 2013)
Depositing User: Reza Zanjirani Farahani
Date Deposited: 14 Sep 2015 11:17
Last Modified: 16 Aug 2017 08:30

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