Mathematical model for dynamic suppliers’ selection strategy in multi-period supply planning with lead-times uncertainty

Abstract

Abstract In the supply planning, the management of uncertainties is the most difficult task but becomes increasingly important in the constantly changing business environment. In literature, most paper examine the uncertainty demand under the assumption of the constant order lead-times. However, lead-time is rarely constant in real time because of unpredictable events in the supply system such as machines’ breakdowns, transport delays, quality issues, etc. In fact, stochastic lead-time has been provoking much more difficulties to supply chain managers than expected. Therefore, managing lead-time uncertainties plays a more and more important role in production planning and inventory control. Moreover, this context pushes companies to diversify their suppliers for outsourcing and/or procurement of raw materials or semi-finished products. The aim of the paper is give a mathematical formulation for dynamic suppliers’ selection strategy in multi-period supply planning for finished products under stochastic lead-times.