Strategies for protecting supply chain networks against facility and transportation disruptions: an improved Benders decomposition approach
Disruptions rarely occur in supply chains, but their negative financial and technical impacts make the recovery process very slow. In this paper, we propose a capacitated supply chain network design (SCND) model under random disruptions both in facility and transportation, which seeks to determine the optimal location and types of distribution centers (DC) and also the best plan to assign customers to each opened DC. Unlike other studies in the extent literature, we use new concepts of reliability to model the strategic behavior of DCs and customers at the network: (1) Failure of DCs might be partial, i.e. a disrupted DC might still be able to serve with a portion of its initial capacity (2) The lost capacity of a disrupted DC shall be provided from a non-disrupted one and (3) The lost capacity fraction of a disrupted DC depends on its initial investment amount in the design phase.
supply chain network benders decomposition facility location random disruption risks