Supply chain network downsizing with product line pruning using a new demand substitution

Supply chain network downsizing with product line pruning using a new demand substitution

0.00 Avg rating0 Votes
Article ID: iaor201527350
Volume: 66
Issue: 10
Start Page Number: 1699
End Page Number: 1716
Publication Date: Oct 2015
Journal: Journal of the Operational Research Society
Authors: , ,
Keywords: combinatorial optimization, networks, demand, risk
Abstract:

This paper presents an optimization model for downsizing a multi‐product supply chain facing bankruptcy risk, where multi‐functional production facilities are shared for producing a group of substitutable products. In order to determine the potential demand after discontinuation of certain product types, the proposed mixed integer programming model incorporates a new general formulation of demand substitution, which allows arbitrary demand diversion and arbitrary replacement rates between products under investigation. The new substitution formulation enables considering uneven substitutions for supply chain network design and therefore it extends currently used substitution approaches. A series of systematically generated downsizing cases confirm the validity of the here proposed approach, and illustrate how downsized chains can successfully adopt to the new circumstances.

Reviews

Required fields are marked *. Your email address will not be published.