Multi-stage stochastic supply chain planning in textile and apparel industry under demand uncertainty with risk considerations

Abstract

In this paper, a multi-product, multi-period, multi-site supply chain production and transportation planning problem under customer demand uncertainty is considered. The problem is modelled using a multi-stage stochastic programming model taking into account the production amount, the inventory and backorder levels as well as the quantity of products to be transported between the different plants and customers in each period. Risk management is also addressed by incorporating a risk metric into the stochastic programming model which leads to a multi-objective optimisation model. The objective aims simultaneously to maximise the expected profit as well as the worst case profit. A real example from textile and apparel industry is studied in order to illustrate the effectiveness of the proposed model and the robustness of the supply chain planning solutions.