Robust supply chain network design based on uncertain disruption probability

To provide support for decision maker to design a robust supply chain network under uncertain environment, with consideration of supply disruption caused by manufacturer's facility impairment or connecting link failure between nodes in the supply chain network, a nonlinear programming for designing the supply chain network was developed under stochastic demand and supply disruption. To overcome the difficulty of solving nonlinear programming, a piecewise linearization method was used to transform the nonlinear problem into a linear programming problem. Furthermore, the robust optimization model for supply chain network design under the uncertain disruption probability was formulated under both box and ellipsoid uncertain sets. Through linear programming and Lagrange dual theory, the proposed robust models were mathematically transformed into tractable linear programming and second-order cone ones respectively. Some numerical examples based on a real-life case were executed to validate the effectiveness of the proposed models. © 2016, Editorial Department of CIMS. All right reserved.