Bounds of Relative Regret Limit in p‐Robust Supply Chain Network Design. (17th January 2014)

• Record Type: Journal Article
• Authors: Tian, Junfeng; Yue, Jinfeng
• Is Part Of: Production and operations management. Volume 23:Number 10(2014)
• Page Start: 1811
• Page End: 1831
• Publication Date: 2014-01-17
• Subjects: Production management -- Periodicals; 658.505
• DOI: 10.1111/poms.12187
• Languages: English
• ISSNs: 1059-1478

Abstract

<abstract abstract-type="main" id="poms12187-abs-0001"> <title> <x xml:space="preserve">Abstract</x> </title> <p>This research studies the <italic>p</italic>‐robust supply chain network design with uncertain demand and cost scenarios. The optimal design integrates the supplier selection together with the facility location and capacity problem. We provide a new framework to obtain the relative regret limit, which is critical in the robust supply chain design but is assumed to be a known value in the existing literature. We obtain lower and upper bounds for relative regret limit and obtain a sequence of optimal solutions for series relative regret limits between the upper and lower bounds. An algorithm for <italic>p</italic>‐robust supply chain network design is provided. A series of numerical examples are designed to find the properties of the bottleneck scenarios. A scenario with low probability and a low optimal objective function value for the scenario has a greater chance of being a bottleneck. To focus only on the influence from the relative regret, we also introduce three separate new objective functions in <italic>p</italic>‐robust design. The proposed new theories and approaches provide a sequence of options for decision makers to reduce the marketing risks effectively in supply chain network design.</p> </abstract>