Journal of Global Optimization

, Volume 26, Issue 1, pp 97–124

An Approach for Strategic Supply Chain Planning under Uncertainty based on Stochastic 0-1 Programming

  • A. Alonso-Ayuso
  • L.F. Escudero
  • A. Garín
  • M.T. Ortuño
  • G. Pérez

DOI: 10.1023/A:1023071216923

Cite this article as:
Alonso-Ayuso, A., Escudero, L., Garín, A. et al. Journal of Global Optimization (2003) 26: 97. doi:10.1023/A:1023071216923


We present a two-stage stochastic 0-1 modeling and a related algorithmic approach for Supply Chain Management under uncertainty, whose goal consists of determining the production topology, plant sizing, product selection, product allocation among plants and vendor selection for raw materials. The objective is the maximization of the expected benefit given by the product net profit over the time horizon minus the investment depreciation and operations costs. The main uncertain parameters are the product net price and demand, the raw material supply cost and the production cost. The first stage is included by the strategic decisions. The second stage is included by the tactical decisions. A tight 0-1 model for the deterministic version is presented. A splitting variable mathematical representation via scenario is presented for the stochastic version of the model. A two-stage version of a Branch and Fix Coordination (BFC) algorithmic approach is proposed for stochastic 0-1 program solving, and some computational experience is reported for cases with dozens of thousands of constraints and continuous variables and hundreds of 0-1 variables.

Supply chain BoM Plant sizing Vendor selection Strategic planning Two-stage stochastic Splitting variable Branch-and-Fix Coordination 

Copyright information

© Kluwer Academic Publishers 2003

Authors and Affiliations

  • A. Alonso-Ayuso
    • 1
  • L.F. Escudero
    • 2
  • A. Garín
    • 3
  • M.T. Ortuño
    • 4
  • G. Pérez
    • 5
  1. 1.Dpto. de CC. Experimentales y TecnologíaUniversidad Rey Juan CarlosMóstoles (Madrid)Spain
  2. 2.Centro de Investigación OperativaUniversidad Miguel HernándezElche (Alicante)Spain
  3. 3.Dpto. de Economía Aplicada IIIUniversidad del País VascoBilbao (Vizcaya)Spain
  4. 4.Dpto. de Estadística e Investigación Operativa IUniversidad Complutense de MadridSpain
  5. 5.Dpto. de Matemática Aplicada, Estadística e I.O.Universidad del País VascoLeioa (Vizcaya)Spain

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