{"title":"Supply chain planning with free trade zone and uncertain demand","authors":"Haoying Sun , Manoj Vanajakumari , Chelliah Sriskandarajah , Subodha Kumar","doi":"10.1016/j.tre.2024.103771","DOIUrl":null,"url":null,"abstract":"<div><div>Our research is inspired by the subcontracting problem at a major oil field services company in North America. The company’s supply chain consists of suppliers bringing raw materials to a Free Trade Zone (FTZ). The FTZ receives raw materials in full containers from various suppliers, and then the company ships them to various plants (e.g. oil excavation sites) frequently via subcontractors. This allows the company to focus on managing only the inbound transportation and inventory at the FTZ. The demand for each raw material is stochastic. We derive an algorithm running at polynomial time for the stochastic programming formulation and perform <span><math><mrow><mi>μ</mi><mo>−</mo></mrow></math></span> regret Robust Optimization to handle the demand uncertainty. We also use a Sample Average Approximation method to alleviate the high computational requirement of the robust optimization model. The modeling approach demonstrated by this paper not only meets the needs of this specific company and industry but also can be applied to other industries with similar supply chain structures.</div></div>","PeriodicalId":49418,"journal":{"name":"Transportation Research Part E-Logistics and Transportation Review","volume":null,"pages":null},"PeriodicalIF":8.3000,"publicationDate":"2024-09-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Transportation Research Part E-Logistics and Transportation Review","FirstCategoryId":"5","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1366554524003624","RegionNum":1,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Our research is inspired by the subcontracting problem at a major oil field services company in North America. The company’s supply chain consists of suppliers bringing raw materials to a Free Trade Zone (FTZ). The FTZ receives raw materials in full containers from various suppliers, and then the company ships them to various plants (e.g. oil excavation sites) frequently via subcontractors. This allows the company to focus on managing only the inbound transportation and inventory at the FTZ. The demand for each raw material is stochastic. We derive an algorithm running at polynomial time for the stochastic programming formulation and perform regret Robust Optimization to handle the demand uncertainty. We also use a Sample Average Approximation method to alleviate the high computational requirement of the robust optimization model. The modeling approach demonstrated by this paper not only meets the needs of this specific company and industry but also can be applied to other industries with similar supply chain structures.
期刊介绍:
Transportation Research Part E: Logistics and Transportation Review is a reputable journal that publishes high-quality articles covering a wide range of topics in the field of logistics and transportation research. The journal welcomes submissions on various subjects, including transport economics, transport infrastructure and investment appraisal, evaluation of public policies related to transportation, empirical and analytical studies of logistics management practices and performance, logistics and operations models, and logistics and supply chain management.
Part E aims to provide informative and well-researched articles that contribute to the understanding and advancement of the field. The content of the journal is complementary to other prestigious journals in transportation research, such as Transportation Research Part A: Policy and Practice, Part B: Methodological, Part C: Emerging Technologies, Part D: Transport and Environment, and Part F: Traffic Psychology and Behaviour. Together, these journals form a comprehensive and cohesive reference for current research in transportation science.