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Robust optimization approach for an aggregate production–distribution planning in a three-level supply chain

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Abstract

An aggregate production–distribution (P-D) planning generates an aggregate plan for regular time, overtime, outsourcing, hiring, and firing that takes into account distributing, inventory holding, backordering, and machine capacity for a definite planning horizon. A large number of P-D problems require decisions to be made in the presence of uncertainty. Previous research on this topic mainly utilized either stochastic programming or fuzzy programming to cope with the uncertainty. This may lead into huge challenges for supply chain managers that use non-robust P-D planning in uncertain environments. Moreover, there has been little discussion about robust optimization approach in aggregate P-D problems so far.Therefore, the aim of this paper is to develop robust optimization in P-D planning in order to minimize the total cost of a three-level supply chain including multiple production facilities, multiple distribution centers, and multiple customer zones with uncertain parameters in terms of a limited set of discrete future economic scenarios. These scenarios are associated with probabilities in an industrial case study. In addition, a trade-off between solution robustness and model robustness using specified weight is studied, and a sensitivity analysis for this trade-off is implemented. Finally, the applicability of the proposed methodology is demonstrated.

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Authors and Affiliations

  1. Young Researchers and Elite Club, Qazvin Branch, Islamic Azad University, Qazvin, Iran

    Amir Hossein Niknamfar

  2. Department of Industrial Engineering, Sharif University of Technology, Tehran, Iran

    Seyed Taghi Akhavan Niaki

  3. Department of Industrial Engineering, Faculty of Engineering, Kharazmi University, Tehran, Iran

    Seyed Hamid Reza Pasandideh

Authors
  1. Amir Hossein Niknamfar
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  2. Seyed Taghi Akhavan Niaki
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  3. Seyed Hamid Reza Pasandideh
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Correspondence to Seyed Taghi Akhavan Niaki.

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Niknamfar, A.H., Niaki, S.T.A. & Pasandideh, S.H.R. Robust optimization approach for an aggregate production–distribution planning in a three-level supply chain. Int J Adv Manuf Technol 76, 623–634 (2015). https://doi.org/10.1007/s00170-014-6292-7

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  • DOI: https://doi.org/10.1007/s00170-014-6292-7

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