Taking market forces into account in the design of production-distribution networks: A positioning by anticipation approach

Didier Vila · Alain Martel · Robert Beauregard

35 citations0/0 files storedJournal of Industrial and Management Optimization

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Supply Chain and Inventory Management Sustainable Supply Chain Management Logistics and Transportation Systems

Abstract

This paper presents an approach to take into account market opportunities when designing production-distribution networks. Three types of sub-markets found in several industrial contexts are analyzed: spot markets, contracts and Vendor Managed Inventory (VMI) agreements. For contracts and VMI agreements, customer preferences with respect to different logistics policies are considered. A price-supply function is proposed to model the spot market behavior. The production-distribution network design problem is formulated as a two-stage stochastic program with fixed recourse. Finally, a sample average approximation method (SAA), based on Monte Carlo sampling techniques, is used to solve the model.

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References

2011Introduction to Stochastic Programming 1987Discrete Choice Analysis: Theory and Application to Travel Demand.2000Stated Choice Methods 2004A stochastic programming approach for supply chain network design under uncertainty 2010Multicommodity Distribution System Design by Benders Decomposition * † ‡2003Monte Carlo Sampling Methods 1997Strategic production-distribution models: A critical review with emphasis on global supply chain models 2007Modeling the supply chain

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2017Methodological approaches to supply chain design 2019Design of robust distribution network under demand uncertainty: A case study in the pulp and paper 2015The impact of operations anticipations on the quality of stochastic location-allocation models

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