The Effect of Supply Disruptions on Supply Chain Design Decisions

Lian Qi · Zuo‐Jun Max Shen · Lawrence Snyder

175 citations0/0 files storedTransportation Science

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Facility Location and Emergency Management Supply Chain and Inventory Management Sustainable Supply Chain Management

Abstract

We study an integrated supply chain design problem that determines the locations of retailers and the assignments of customers to retailers to minimize the expected costs of location, transportation, and inventory. The system is subject to random supply disruptions that may occur at either the supplier or the retailers. Analytical and numerical studies reveal the effects of these disruptions on retailer locations and customer allocations. In addition, we demonstrate numerically that the cost savings from considering supply disruptions at the supply chain design phase (rather than at the tactical or operational phase) are usually significant.

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References

2006On the Value of Mitigation and Contingency Strategies for Managing Supply Chain Disruption Risks 1979Decision Systems for Inventory Management and Production Planning 1997Network and Discrete Location: Models, Algorithms and Applications.1995Network and Discrete Location 1978A Dual-Based Procedure for Uncapacitated Facility Location 2015OR/MS models for supply chain disruptions: a review 2005Reliability Models for Facility Location: The Expected Failure Cost Case 1986Decision systems for inventory management and production planning

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2013Robust and reliable forward–reverse logistics network design under demand uncertainty and facility disruptions 2016Designing a supply chain resilient to major disruptions and supply/demand interruptions 2017Proactive and reactive models for disaster resilient supply chain 2020The design of resilient food supply chain networks prone to epidemic disruptions 2015Structural quantification of the ripple effect in the supply chain

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