OPTIMISING MULTI-TIERED SUPPLY CHAIN NETWORKS WITH MULTIPLE ECONOMIC ENTITIES UNDER UNCERTAINTY

Abstract

The paper focuses on supply chain networks (SCNs) under uncertainty and presents an optimal supply chain network design model to address the uncertainty. The model takes into account the decentralized decision-making of manufacturers, wholesalers, retailers, freight carriers, and demand markets (i.e., consumers) as well as their interactions. Optimal solutions can be derived using the expected residual minimization (ERM) method, which is applied to an existing descriptive SCN model (i.e., supply chain network equilibrium (SCNE) model) with variability of its parameter values. The model can provide the most robust solutions against the uncertainty and bring the stability to total surplus. Numerical examples are then undertaken to validate the performance of the model developed as compared to that of the SCNE model. The optimal states of SCNs are also identified through several numerical tests for the cases where the parameter values of the model are variable due to the uncertainty.