Integrated Selection of Supply Portfolio and Scheduling of Production and Distribution

Abstract

The key operational functions in a supply chain are supply, production and distribution operations. To achieve a high performance of supply chain, it is crucial to integrate these three functions and jointly schedule supply, production and distribution in a coordinated manner.

Problems

6.1

Modify the SMIP models presented in this chapter for multiple part types with subsets of part types required for each customer order and subsets of suppliers available for each part type.

6.2

Modify the SMIP models with single and multiple batch shipping of products to distribution centers to account for a limited storage space for products waiting for shipments.

6.3

Mean-risk scheduling in a supply chain

(a) Modify the SMIP models presented in this chapter to minimize expected cost and CVaR of cost or maximize expected service level and CVaR of service level.

(b) How should the values of the optimized objective functions be scaled into the interval [0,1] to avoid dimensional inconsistency among the two objectives and how should the trade-off parameter be selected?

(c) How would you interpret the mean-risk supply chain schedules?

6.4

Mixed mean-risk scheduling in a supply chain

(a) Modify the SMIP models presented in this chapter to optimize expected cost and CVaR of service level or optimize expected service level and CVaR of cost.

(b) How should the values of the optimized objective functions be scaled into the interval [0,1] to avoid dimensional inconsistency among the two objectives and how should the trade-off parameter be selected?

(c) How would you interpret the mixed mean-risk supply chain schedules?

6.5

Explain why the supply portfolios for different shipping methods of products to distribution centers are similar and the service-oriented portfolios are more diversified than the cost-oriented portfolios.