Optimal distribution (re)planning in a centralized multi-stage supply network under conditions of the ripple effect and structure dynamics

Dmitry Ivanov, Alexander Pavlov and Boris Sokolov

European Journal of Operational Research, 2014, vol. 237, issue 2, 758-770

Abstract: In this paper, an original approach to formulate and solve a multi-period and multi-commodity distribution (re)planning problem for a multi-stage centralized upstream network with structure dynamics considerations is proposed. First original idea of this study is description of the supply chain as a non-stationary dynamic system along with a linear programming (LP) model. This allows distribute design and control variables between dynamic and static models. Second original idea is to transit from the classical LP model to maximal flow problem by excluding demand constraint from the LP model. The first contribution of this study is multi-objective problem formulation that opens additional perspectives for decision-making beyond cost-oriented optimization. Second, the maximal flow LP model allows the finding of a feasible solution even for unbalanced supply and demand cases without relaxing hard capacity constraints. Third, this allows improve service level at the strategic inventory holding point. Fourth, structure dynamics and ripple effect can be taken into account. Structure dynamics allows considering different execution scenarios and developing suggestions on replanning in the case of disturbances. The graph of structural reliability allows identify the optimistic and pessimistic scenarios. These scenarios are used for computational experiments with the developed model and the industrial models. With the developed model, the practical issues of scenario-based risk identification strategy and operational distribution planning can be interlinked.

Keywords: Logistics; Distribution planning; Structure dynamics; Ripple effect; Service level; Linear programming (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221714001386
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:237:y:2014:i:2:p:758-770

DOI: 10.1016/j.ejor.2014.02.023

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().