Stochastic Multi-Stage Manufacturing Supply Chain Design Considering Layered Mini-Cellular System Concept

Supply chain design attempts to deploy resources to synchronize product flow through multiple tiers of the network and eventually fulfill customers’ requirements (Lee, 2000). Traditionally, due to limited sales information and trade barriers, consumers chose local products. But nowadays consumers access the ever opening global market much easier with the help of the globalization. Though overall demand keeps increasing, the market competition becomes fierce as more and more competitors emerge. The highly dynamic market results in difficulties in predicting the demand for companies’ products. Furthermore, the demand uncertainties exacerbate the challenge for synchronizing production. Companies start to build more safety stock and hold excess capacity, resulting in decrease of system efficiency. Thus, resource allocation becomes a critical part in the supply chain design. Three levels of resource allocation in supply chain design are summarized in Figure 1. This is only an attempt to present multiple perspectives of resource allocation problems without guaranteeing the coverage of all industrial circumstances. The exceptions and variations in this framework could always be found in the real world applications.