A disruption recovery plan in a three-stage production-inventory system

Abstract

This paper proposes a recovery plan for managing disruptions in a three-stage production-inventory system under a mixed production environment. First, a mathematical model is developed to deal with a disruption at any stage while maximizing total profit during the recovery-time window. The model is solved after the occurrence of a disruption event, with changed data used to generate a revised plan. We also propose a new and efficient heuristic for solving the developed mathematical model. Second, multiple disruptions are considered, where a new disruption may or may not affect the recovery plans of earlier disruptions. The heuristic, developed for a single disruption, is extended to deal with a series of disruptions so that it can be implemented for disruption recovery on a real-time basis. We compare the heuristic solutions with those obtained by a standard search algorithm for a set of randomly generated disruption test problems, and that show the consistent performance of our developed heuristic with lower computational times. Finally, some numerical examples and a real-world case study are presented to demonstrate the benefits and usefulness of our proposed approach.