A Robust Approach for Redesigning Three Level Supply Chain Warehouses in Uncertain Condition

Abstract

Nowadays, warehouses dedicate considerable proportion of network's costs in a supply chain and conditions such as uncertainty in cost parameters, production capacity and demands emphasize on necessity of reasonable decisions on warehouse management. In this paper, uncertainty has been investigated under discrete different scenarios. Moreover, a new model has been proposed for redesigning of warehouses considering the min-max cost function for scenarios in specific customer servicing coverage radius. The robust approach used in this paper has been investigated by numerical examples and the obtained costs have been compared with the expected value model results. Findings imply efficiency of the proposed robust approach. Also, the costs resulted from the new relocation model have been evaluated with respect to the costs of continuing the current supply chain configuration and the findings indicate a significant cost improvement.

Keywords

• Supply chain
• Warehouse relocation
• Uncertainty
• Robust approach