Journal of Korean Institute of Industrial Engineers (대한산업공학회지)

Korean Institute of Industrial Engineers (대한산업공학회)
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A Solution for Sourcing Decisions under Supply Capacity Risk

공급능력 리스크를 고려한 최적 구매계획 해법

  • Jang, Won-Jun (Department of Industrial and Management Systems Engineering, Kyung Hee University) ;
  • Park, Yang-Byung (Department of Industrial and Management Systems Engineering, Kyung Hee University)
  • 장원준 (경희대학교 산업경영공학과) ;
  • 박양병 (경희대학교 산업경영공학과)
  • Received : 2015.05.02
  • Accepted : 2015.09.08
  • Published : 2016.02.15
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Abstract

This paper proposes a mathematical model-based solution for sourcing decisions with an objective of minimizing the manufacturer's total cost in the two-echelon supply chain with supply capacity risk. The risk impact is represented by uniform, beta, and triangular distributions. For the mathematical model, the probability vector of normal, risk, and recovery statuses are developed by using the status transition probability matrix and the equations for estimating the supply capacity under risk and recovery statuses are derived for each of the three probability distributions. Those formulas derived are validated using the sampling method. The results of the simulation study on the test problem show that the sourcing decisions using the proposed solution reduce the total cost by 1.6~3.7%, compared with the ones without a consideration of supply capacity risk. The total cost reduction increases approximately in a linear fashion as the probability of risk occurrence or reduction rate of supply capacity due to risk events is increased.

Keywords

References

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