Strategic reliable supply chain network design: determining tradeoffs between cost and risk

The design of a supply chain network (SCN) should address two conflicting objectives, i.e. inexpensive yet reliable operation. This paper presents models to choose facilities and determine distribution options while considering the expected risk not serving customers attributed shortages. goal is with lower cost under traditional objectives. We formulate stochastic mixed-integer biobjective programming model protection solve this problem progressive hedging algorithm (PHA). examine tradeoff curve between through case study involving Shanghai in China. results indicate that substantial improvements reliability can be reached limited increase total cost.