A stochastic aggregate production planning model in a green supply chain: Considering flexible lead times, nonlinear purchase and shortage cost functions

S.M.J. Mirzapour Al-e-hashem, A. Baboli and Z. Sazvar

European Journal of Operational Research, 2013, vol. 230, issue 1, 26-41

Abstract: In this paper we develop a stochastic programming approach to solve a multi-period multi-product multi-site aggregate production planning problem in a green supply chain for a medium-term planning horizon under the assumption of demand uncertainty. The proposed model has the following features: (i) the majority of supply chain cost parameters are considered; (ii) quantity discounts to encourage the producer to order more from the suppliers in one period, instead of splitting the order into periodical small quantities, are considered; (iii) the interrelationship between lead time and transportation cost is considered, as well as that between lead time and greenhouse gas emission level; (iv) demand uncertainty is assumed to follow a pre-specified distribution function; (v) shortages are penalized by a general multiple breakpoint function, to persuade producers to reduce backorders as much as possible; (vi) some indicators of a green supply chain, such as greenhouse gas emissions and waste management are also incorporated into the model. The proposed model is first a nonlinear mixed integer programming which is converted into a linear one by applying some theoretical and numerical techniques. Due to the convexity of the model, the local solution obtained from linear programming solvers is also the global solution. Finally, a numerical example is presented to demonstrate the validity of the proposed model.

Keywords: Supply chain management; Aggregate production planning; Green principles; Quantity discount; Nonlinear shortage cost; Demand uncertainty (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:230:y:2013:i:1:p:26-41

DOI: 10.1016/j.ejor.2013.03.033

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