Supply chain optimization with variable demand by considering financial criteria and scenarios

Abstract

This paper contemplates the supply chain design problem of a large-scale company by considering the maximization of the Net Present Value. In particular, the variability of the demand for each type of product at each customer zone has been estimated. As starting point, this paper considers an established supply chain for which the main problem is to determine the decisions regarding expansion of distribution centers. The problem is solved by using a mixed-integer linear programming model, which optimizes the different demand scenarios. The proposed methodology uses a scheme of optimization based on the generation of multiple demand scenarios of the supply network. The model is based on a real case taken from a multinational food company, which supplies to the Colombian and some international markets. The obtained results were compared with the equivalent present costs minimization scheme of the supply network, and showed the importance and efficiency of the proposed approach as an alternative for the supply chain design with stochastic parameters.