Abstract
Coordinating various activities among company members facing real-life uncertainties or disruptions is a great issue of concern in today’s business world. With this background, a multi-stage decentralised supply chain (SC) network is studied in this paper, where demand uncertainties are considered in each stage of the chain. We consider a serial SC network with single independent entities (manufacturer – distributor – retailer) in each level under restricted information sharing characteristics. The increased variability of uncertain demand through upward sections of the chain is studied. A two-phase planning model is proposed to coordinate the independent members with random customer demand. We develop a scenario-based stochastic optimisation approach where a probability is assigned for each scenario. A rolling horizon-based dynamic updating approach is proposed to update the model results for the current period as uncertainties are revealed. We develop a rule-based solution heuristic and conduct numerical analyses to validate the model. Our results are compared with two approaches – deterministic with mean demand and centralised structure with multiple scenarios. The comparative result shows that our model provides better feasible results with fewer shortage costs. Also, sensitivity analyses are performed on important parameters to observe their effect on the model.
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