Perspectives in multilevel decision-making in the process industry

Abstract

Decisions in supply chains are hierarchically organized. Strategic decisions involve the long-term planning of the structure of the supply chain network. Tactical decisions are mid-term plans to allocate the production and distribution of materials, while operational decisions are related to the daily planning of the execution of manufacturing operations. These planning processes are conducted independently with minimal exchange of information between them. Achieving a better coordination between these processes allows companies to capture benefits that are currently out of their reach and improve the communication among their functional areas. We propose a network representation for the multilevel decision structure and analyze the components that are involved in finding integrated solutions that maximize the sum of the benefits of all nodes of the decision network. Although such task is very challenging, significant research progress has been made in each component of this structure. An overview of strategic models, mid-term planning models, and scheduling models is presented to address the solution of each node in the decision network. Coordination mechanisms for converging the integrated solutions are also analyzed, including solving large-scale models, multiobjective optimization, bi-level programming, and decomposition. We conclude by summarizing the challenges that hinder the full integration of multilevel decision making in supply chain management.

Inventory and Production Dynamics in a Discrete-Time Vendor-Managed Inventory Supply Chain System

“…Firstly, we analytically studied the impact of reorder point, delivery frequency, lead time, and demand characteristics on the range of the retailer's inventory under uncertain demand by extending a more generalized replenishment policy. Secondly, we derived the necessary and sufficient stability conditions of the VMI system for arbitrary lead times by considering the interaction between the retailer subsystem and the manufacturer subsystem, which are significant due to the development of global supply chains and complicated manufacturing process [31]. We prove that production fluctuations are independent of the replenishment parameters in the reorder point policy.…”

Hierarchical multilevel optimization with multiple-leaders multiple-followers setting and nonseparable objectives

“…The second example is the supply chain management problem. Supply chains are systems with multiple components such as supplier, manufacturer, distributer, retailer and customer, that exchange information with one another [2]. Mathematical models formulated to analyse the overall economic process of the supply chain management are usually described by MLMF games with at least three hierarchical levels (see for instance [8], where all the involved functions are assumed to be linear).…”

A Robust Optimization Modeling for Mine Supply Chain Planning under the Big Data

“…The supply chain planning involves many functional areas of procurement, production and distribution, and across strategic network planning, production planning and scheduling, purchasing and material requirement planning, and distribution and transport planning [6,10]. Brunaud and Grossmann [11] put forward the statement that some researchers carried out relevant studies on the supply chain modeling and optimization issues in a variety of industries. Nishi et al [12] proposed a framework for distributed optimization of supply chain planning and coordination approach.…”

“…Constraints (8) and ( 9) represent the balance constraints. Constraints (10) and (11) ensure that the amount of ore products is required to be between the minimum and maximum inventory in each concentrating mill and logistics center. Constraints ( 12) and ( 13) represent the logical constraint.…”