Supply Chain Planning under Uncertainty: A Chance Constrained Programming Approach

Uncertainty issues associated with a multi-site, multi-product supply chain planning problem has been analyzed in this paper using the chance constraint programming approach. In literature, such problems have been addressed using the two stage stochastic programming approach. While this approach has merits in terms of decomposition, computational complexity even for small size planning problem is large. This problem is overcome in our paper by adopting the chance constraint programming approach for solving the mid term planning problem. It is seen that this approach is generic, relatively simple to use, and can be adapted for bigger size planning problems as well. We demonstrate the proposed approach on a relatively moderate size planning problem taken from the work of McDonald and Karimi (1997) and discuss various aspects of uncertainty in context of this problem.