A heuristic procedure for the two-level control of serial supply chains under fuzzy customer demand

This paper presents a new hierarchical, two-level approach to inventory management and control in supply chains (SCs). A SC is viewed as a large-scale system that consists of production and inventory units organised in a serial structure. It is supposed that the SC operates under uncertainty in customer demand, which is described by imprecise terms and modelled by fuzzy sets. Overall SC inventories control is achieved at two levels. First, an SC problem is decomposed into a number of subproblems related to its constituent parts, which form a followers level. Each follower is optimised independently according to its local objective. In order to improve overall SC performance, a leader level coordinates SC inventories control by modifying the optimisation subproblems at the followers level. This process is repeated iteratively until a satisfactory overall SC performance is achieved.