A new robust model for inventory- locating of single-Periodical supply chain with three-echelon for small and medium business enterprises with uncertain demand

Abstract

Today, field of production and service is faced with competition among the supply chains by changing the competition pattern of the independent companies. Most of the small and medium businesses (SMEs) still use traditional viewpoint for supply, production and distribution planning. It means, each of these SMEs plan their tasks independently, this will increase the total cost of the supply chain in many cases. In this study, a robust model of inventory-locating supply chain is proposed in three-level with uncertain demand. The model has been considered in single-period, multi-product state along with some transportation models with three levels of producers – distributors- retailers in certain and robust mode. Considering some transportation models along with robusting the model and the possibility of sending goods directly from the factory to the retailer is one of the innovations of this study. The objectives of the proposed model are to minimize the total cost of the three-leveled supply chain and to find the amount of safety stock. The certain model is solved by GAMS and the robust model is also solved by GAMS in single-objective mode and then transferred to the augmented ε-constraint method. The results have been discussed after solving the model.

Keywords

• supply chain
• locating
• inventory
• uncertain demand
• robust optimization
• small and medium business (smes)