A Bilevel Programming Framework for Enterprise-wide Supply Chain Planning Problems under Uncertainty

Enterprise-wide supply chain planning problems inherently exhibit multi-level decision network structures, where for example, one level may correspond to a local plant control/scheduling/planning problem and another level to a plant-wide planning/distribution network problem. Such multi-level decision network structures can be mathematically represented using multi-level mathematical programming principles. In this paper, we address bilevel decision-making problems under uncertainty in the context of enterprise-wide supply chain optimization with one level corresponding to a plantspecific planning problem and the other to a distribution network problem. We first describe how such problems can be modelled as bilevel programming problems and then present an effective solution strategy based on parametric programming techniques.