Two-Stage Stochastic Program for Supply Chain Network Design under Facility Disruptions

A supply chain disruption is an unanticipated event that disrupts the flow of materials in a chain. Any given could have significant negative impact on entire Supply network designs usually consider two stage decision process business environment. The first deals with strategic levels, such as to determine facility locations and their capacity, while second considers tactical level, production quantity, delivery routing. Each stage’s affect other result, it not be determined individual. However, often fail account for disruptions. In this paper, paper proposed two-stage stochastic programming model four-echelon global design problem considering possible disruptions at facilities. modified simulated annealing (SA) algorithm developed stage. comparison traditional framework shows under disruption, solutions outperform one. This study demonstrates managerial viability designing which disruptive events are proactively accounted for.