Distribution and Inventory Planning in a Supply Chain Under Transportation Route Disruptions and Uncertain Demands

Abstract

This article considers transportation disruptions and its detrimental impact on the quality of the enroute shipment. The authors consider a supply chain system of a short life cycle product that has a capacitated supplier, a retailer and multiple routes of transportation under different disruption risks, uncertain cost of transportation, and uncertain demands. The authors investigate a hybrid problem in which the firm needs to develop a suitable distribution strategy under disruption risks along with an optimal checking policy when faced with the supply of varying quantities of damaged items. The authors formulate a non-linear mathematical model in which the overall objective is to maximise the expected profit and to help the firm in decision making under uncertain environments. Lastly, a statistical study is carried out to perform uncertainty analysis.