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Optimal Design and Operation of Supply Chain Networks under Demand Uncertainty
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Author(s): Michael C. Georgiadis (University of Western Macedonia, Greece)and Pantelis Longinidis (University of Western Macedonia, Greece)
Copyright: 2011
Pages: 36
Source title:
Supply Chain Optimization, Design, and Management: Advances and Intelligent Methods
Source Author(s)/Editor(s): Ioannis Minis (University of the Aegean, Greece), Vasileios Zeimpekis (University of the Aegean, Greece), Georgios Dounias (University of the Aegean, Greece)and Nicholas Ampazis (University of the Aegean, Greece)
DOI: 10.4018/978-1-61520-633-9.ch004
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Abstract
This chapter considers a detailed mathematical formulation for the problem of designing supply chain networks comprising multiproduct production facilities with shared production resources, warehouses, distribution centers and customer zones and operating under time varying demand uncertainty. Uncertainty is captured in terms of a number of likely scenarios possible to materialize during the life time of the network. The problem is formulated as a mixed-integer linear programming problem and solved to global optimality using standard branch-and-bound techniques. A case study concerned with the establishment of Europe-wide supply chain is used to illustrate the applicability and efficiency of the proposed approach. The results obtained provide a good indication of the value of having a model that takes into account the complex interactions that exist in such networks and the effect of inventory levels to the design and operation.
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