Optimization Structures for Supply Chain Management

Abstract

This paper compares three structures for supply chain production management. To take advantage of the special problem configuration, it models the supply chain planning as a network flow optimization problem. The model considers important aspects as: planning and coordination of activities among enterprises, production capacity constraints, production cost of each enterprise, and demand variation.

Two-Level Environment for Supply Chain Management

“…The literature considers two approaches to solve this problem: a generative technique takes a set of criteria and constraints and generates (prescribes) values for a set of decision variables (Carvalho and Furtado, 2002) and an evaluative technique that evaluates the performance of a system under uncertainty (Carvalho and Machado, 2000). A combination of both approaches known as simulationoptimization is growing of importance (Law, 2002;Azadivar, 1999).…”