Supply chain network design: an MILP and Monte Carlo simulation approach
Autor(a) principal: | |
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Data de Publicação: | 2024 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Brazilian Journal of Operations & Production Management (Online) |
Texto Completo: | https://bjopm.org.br/bjopm/article/view/1936 |
Resumo: | Goal: This study aims to minimize the total cost of a supply chain network and determine the optimal product flow under demand uncertainty. Design / Methodology / Approach: A mathematical model is presented to minimize the total supply chain cost by identifying the optimal facility locations and product flows. The applicability of the proposed model is evaluated through a real-life case study of a multinational sporting goods retailer with sensitivity analysis. Moreover, Monte Carlo simulation is used to capture the demand uncertainty and test the robustness of the model. Results: The minimized cost is achieved with optimal facility locations and product flows. The optimal result shows a 3% reduction in the total cost, making it the most robust solution under demand uncertainty. Limitations of the investigation: The proposed model is only applicable to a single-commodity supply chain network. In addition, the cost components of the network are limited to facility costs and transportation costs, disregarding the other cost components. Practical implications: This research demonstrates a methodology that can be used as a decision support system by managers to make strategic and tactical decisions in a supply chain network when demand is uncertain. Originality / Value: The MILP and simulation techniques used together to construct a three-tiered supply chain under uncertainty receive little attention in the literature. In addition to developing a novel three-echelon MILP model, this research makes use of a real-world case study to illustrate the methodology's performance in the context of demand uncertainty through simulation. |
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Brazilian Journal of Operations & Production Management (Online) |
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Supply chain network design: an MILP and Monte Carlo simulation approachSupply Chain NetworkSupply Chain Network DesignMixed Integer Linear ProgrammingMonte Carlo Simu-lationDemand UncertaintyGoal: This study aims to minimize the total cost of a supply chain network and determine the optimal product flow under demand uncertainty. Design / Methodology / Approach: A mathematical model is presented to minimize the total supply chain cost by identifying the optimal facility locations and product flows. The applicability of the proposed model is evaluated through a real-life case study of a multinational sporting goods retailer with sensitivity analysis. Moreover, Monte Carlo simulation is used to capture the demand uncertainty and test the robustness of the model. Results: The minimized cost is achieved with optimal facility locations and product flows. The optimal result shows a 3% reduction in the total cost, making it the most robust solution under demand uncertainty. Limitations of the investigation: The proposed model is only applicable to a single-commodity supply chain network. In addition, the cost components of the network are limited to facility costs and transportation costs, disregarding the other cost components. Practical implications: This research demonstrates a methodology that can be used as a decision support system by managers to make strategic and tactical decisions in a supply chain network when demand is uncertain. Originality / Value: The MILP and simulation techniques used together to construct a three-tiered supply chain under uncertainty receive little attention in the literature. In addition to developing a novel three-echelon MILP model, this research makes use of a real-world case study to illustrate the methodology's performance in the context of demand uncertainty through simulation.Brazilian Association for Industrial Engineering and Operations Management (ABEPRO)2024-02-10info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionResearch paperapplication/pdfhttps://bjopm.org.br/bjopm/article/view/193610.14488/BJOPM.1936.2024Brazilian Journal of Operations & Production Management; Vol. 21 No. 1 (2024); 1936 2237-8960reponame:Brazilian Journal of Operations & Production Management (Online)instname:Associação Brasileira de Engenharia de Produção (ABEPRO)instacron:ABEPROenghttps://bjopm.org.br/bjopm/article/view/1936/1068Copyright (c) 2024 Oyshik Bhowmik, Shohel Parvezhttp://creativecommons.org/licenses/by/4.0info:eu-repo/semantics/openAccessBhowmik, Oyshik Parvez, Shohel2024-02-10T14:08:02Zoai:ojs.bjopm.org.br:article/1936Revistahttps://bjopm.org.br/bjopmONGhttps://bjopm.org.br/bjopm/oaibjopm.journal@gmail.com2237-89601679-8171opendoar:2024-02-10T14:08:02Brazilian Journal of Operations & Production Management (Online) - Associação Brasileira de Engenharia de Produção (ABEPRO)false |
dc.title.none.fl_str_mv |
Supply chain network design: an MILP and Monte Carlo simulation approach |
title |
Supply chain network design: an MILP and Monte Carlo simulation approach |
spellingShingle |
Supply chain network design: an MILP and Monte Carlo simulation approach Bhowmik, Oyshik Supply Chain Network Supply Chain Network Design Mixed Integer Linear Programming Monte Carlo Simu-lation Demand Uncertainty |
title_short |
Supply chain network design: an MILP and Monte Carlo simulation approach |
title_full |
Supply chain network design: an MILP and Monte Carlo simulation approach |
title_fullStr |
Supply chain network design: an MILP and Monte Carlo simulation approach |
title_full_unstemmed |
Supply chain network design: an MILP and Monte Carlo simulation approach |
title_sort |
Supply chain network design: an MILP and Monte Carlo simulation approach |
author |
Bhowmik, Oyshik |
author_facet |
Bhowmik, Oyshik Parvez, Shohel |
author_role |
author |
author2 |
Parvez, Shohel |
author2_role |
author |
dc.contributor.author.fl_str_mv |
Bhowmik, Oyshik Parvez, Shohel |
dc.subject.por.fl_str_mv |
Supply Chain Network Supply Chain Network Design Mixed Integer Linear Programming Monte Carlo Simu-lation Demand Uncertainty |
topic |
Supply Chain Network Supply Chain Network Design Mixed Integer Linear Programming Monte Carlo Simu-lation Demand Uncertainty |
description |
Goal: This study aims to minimize the total cost of a supply chain network and determine the optimal product flow under demand uncertainty. Design / Methodology / Approach: A mathematical model is presented to minimize the total supply chain cost by identifying the optimal facility locations and product flows. The applicability of the proposed model is evaluated through a real-life case study of a multinational sporting goods retailer with sensitivity analysis. Moreover, Monte Carlo simulation is used to capture the demand uncertainty and test the robustness of the model. Results: The minimized cost is achieved with optimal facility locations and product flows. The optimal result shows a 3% reduction in the total cost, making it the most robust solution under demand uncertainty. Limitations of the investigation: The proposed model is only applicable to a single-commodity supply chain network. In addition, the cost components of the network are limited to facility costs and transportation costs, disregarding the other cost components. Practical implications: This research demonstrates a methodology that can be used as a decision support system by managers to make strategic and tactical decisions in a supply chain network when demand is uncertain. Originality / Value: The MILP and simulation techniques used together to construct a three-tiered supply chain under uncertainty receive little attention in the literature. In addition to developing a novel three-echelon MILP model, this research makes use of a real-world case study to illustrate the methodology's performance in the context of demand uncertainty through simulation. |
publishDate |
2024 |
dc.date.none.fl_str_mv |
2024-02-10 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion Research paper |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
https://bjopm.org.br/bjopm/article/view/1936 10.14488/BJOPM.1936.2024 |
url |
https://bjopm.org.br/bjopm/article/view/1936 |
identifier_str_mv |
10.14488/BJOPM.1936.2024 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
https://bjopm.org.br/bjopm/article/view/1936/1068 |
dc.rights.driver.fl_str_mv |
Copyright (c) 2024 Oyshik Bhowmik, Shohel Parvez http://creativecommons.org/licenses/by/4.0 info:eu-repo/semantics/openAccess |
rights_invalid_str_mv |
Copyright (c) 2024 Oyshik Bhowmik, Shohel Parvez http://creativecommons.org/licenses/by/4.0 |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Brazilian Association for Industrial Engineering and Operations Management (ABEPRO) |
publisher.none.fl_str_mv |
Brazilian Association for Industrial Engineering and Operations Management (ABEPRO) |
dc.source.none.fl_str_mv |
Brazilian Journal of Operations & Production Management; Vol. 21 No. 1 (2024); 1936 2237-8960 reponame:Brazilian Journal of Operations & Production Management (Online) instname:Associação Brasileira de Engenharia de Produção (ABEPRO) instacron:ABEPRO |
instname_str |
Associação Brasileira de Engenharia de Produção (ABEPRO) |
instacron_str |
ABEPRO |
institution |
ABEPRO |
reponame_str |
Brazilian Journal of Operations & Production Management (Online) |
collection |
Brazilian Journal of Operations & Production Management (Online) |
repository.name.fl_str_mv |
Brazilian Journal of Operations & Production Management (Online) - Associação Brasileira de Engenharia de Produção (ABEPRO) |
repository.mail.fl_str_mv |
bjopm.journal@gmail.com |
_version_ |
1797051459491069952 |