Reliable supply chain network design problem: Supermodularity and a cutting-plane approach

Teresa Verduzco-Garza, Angela Martínez González, Marijose Robles Tenorio, Angel Loredo García

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

We study the reliable supply chain network design problem with the consideration of unexpected facility failures with probabilities. When such failure occurs, a facility loses its full capacity, and the customers that originally assigned to it have to be reassigned to another working facility. The goal is to minimize the initial setup costs and expected transportation costs in normal and failure scenarios. We propose a cutting-plane method based on the supermodularity of the problem. The supermodularity is general in the sense that it holds for the problem regardless the facility failures are correlated or not. Therefore, the proposed approach is capable of solving the reliable supply chain network design problem for both cases. To the best of our knowledge, the proposed approach is the first in the literature that solves the problem exactly with correlated failures. The preliminary computational studies show that this approach outperforms the best-known algorithm in the literature with uncorrelated disruptions on benchmark instances.
Original languageEnglish
Title of host publicationIIE Annual Conference and Expo 2015
PublisherInstitute of Industrial Engineers
ISBN (Electronic)9780983762447
ISBN (Print)9780983762447
Publication statusPublished - 1 Jan 2015
EventIIE Annual Conference and Expo 2015 - Nashville, United States
Duration: 30 May 20152 Jun 2015

Publication series

NameIIE Annual Conference and Expo 2015

Conference

ConferenceIIE Annual Conference and Expo 2015
CountryUnited States
CityNashville
Period30/5/152/6/15

All Science Journal Classification (ASJC) codes

  • Control and Systems Engineering
  • Industrial and Manufacturing Engineering

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  • Cite this

    Verduzco-Garza, T., González, A. M., Tenorio, M. R., & García, A. L. (2015). Reliable supply chain network design problem: Supermodularity and a cutting-plane approach. In IIE Annual Conference and Expo 2015 (IIE Annual Conference and Expo 2015). Institute of Industrial Engineers.