Robust Operation Strategy Design for an Electronic Market Enabled Supply Chain with Uncertain Variable Costs

Abstract

An operation model is proposed in this paper for an electronic market enabled supply chain with uncertain variable costs. The supply chain consists of multi-supplier and multi-customer, suppliers can provide many kinds of product to different customers directly or through electronic market. Uncertain variable costs are described as symmetrical and limited intervals. A robust operation model for this supply chain is constructed by using the robust optimization method based on interval analysis. The operation model is a multi-objective programming problem satisfying several conflict objectives, such as meeting the demands of all customers, minimizing the total system cost, the availabilities of suppliers’ capacities not below a certain level, and robustness of decision to uncertain variable costs. The result of a numerical example proved that the solution of the model is the most conservative. However, it can ensure the robustness of the operation of the supply chain effectively.