Resilient supply chain design and operations with decision-dependent uncertainty using a data-driven robust optimization approach

To addresses the design and operations of resilient supply chains under uncertain disruptions, a general framework is proposed for resilient supply chain optimization, including a quantitative measure of resilience and a holistic biobjective two-stage adaptive robust fractional programming model with decision-dependent uncertainty set for simultaneously optimizing both the economic objective and the resilience objective of supply chains. The decision-dependent uncertainty set ensures that the uncertain parameters (e.g., the remaining production capacities of facilities after disruptions) are dependent on first-stage decisions, including facility location decisions and production capacity decisions. A data-driven method is used to construct the uncertainty set to fully extract information from historical data. Moreover, the proposed model takes the time delay between disruptions and recovery into consideration. To tackle the computational challenge of solving the resulting multilevel optimization problem, two solution strategies are proposed. The applicability of the proposed approach is illustrated through applications on a location-transportation problem and on a spatially-explicit biofuel supply chain optimization problem. © 2018 American Institute of Chemical Engineers AIChE J, 65: 1006–1021, 2019     

Sustainable management and design of the energy-water-food nexus using a mathematical programming approach

Global primary and secondary resources are important for economic growth. Resource management and environment conservation are currently frequently discussed topics worldwide. In this study, a discrete optimization model formulation is presented for an integrated energy, water, and food (EWF) supply chain problem. The optimization model examines the temporal and spatial integration of the EWF supply chain elements to provide optimal infrastructure capacity expansion of essential commodities within the EWF system, and their corresponding periodic optimal supply for a given region. Furthermore, the model considers endogenous demand between the EWF elements that reflect the interdependency of nexus elements. A mixed integer linear programming model is developed to assist in the process of optimal infrastructure capacity expansion and operation of the EWF system. A case study is given to show the application of the proposed mathematical programming model. Several scenarios are assumed for the case study under different commodity prices and climate change conditions. In addition, diversification in the energy and agriculture sectors is examined by shifting from international refined sugar trading to bioethanol production. The results show economic gains of ~10% under the emergence of bioethanol production compared with the business-as-usual scenario. Production dynamic exits for the production of refined sugar, bioethanol, and power from sugarcane and bagasse resources over time in the considered sale price range for the refined sugar and bioethanol products.     

Optimal design of closed-loop supply chain networks with multifunctional nodes

This paper introduces a general mathematical programming framework that employs an innovative generalized supply chain network (SCN) composition coupled with forward and reverse logistics activities. Generalized echelon will have the ability to produce/distribute all forward materials/products and recover/redistribute simultaneously all the returned which are categorized with respect to their quality zone. The work addresses a multi-product, multi-echelon and multi-period Mixed-Integer Linear Programming (MILP) problem in a closed-loop supply chain network design solved to global optimality using standard branch-and-bound techniques. Further, the model aims to find the optimal structure of the network in order to satisfy market demand with the minimum overall capital and operational cost. Applicability and robustness of the proposed model are illustrated by using a medium real case study from a European consumer goods company whereas its benefits are valued through a comparison with a counterpart model that utilizes the mainstream fixed echelon network structure.     

Optimal design and operations of supply chain networks for water management in shale gas production: MILFP model and algorithms for the water‐energy nexus

The optimal design and operations of water supply chain networks for shale gas production is addressed. A mixed‐integer linear fractional programming (MILFP) model is developed with the objective to maximize profit per unit freshwater consumption, such that both economic performance and water‐use efficiency are optimized. The model simultaneously accounts for the design and operational decisions for freshwater source selection, multiple transportation modes, and water management options. Water management options include disposal, commercial centralized wastewater treatment, and onsite treatment (filtration, lime softening, thermal distillation). To globally optimize the resulting MILFP problem efficiently, three tailored solution algorithms are presented: a parametric approach, a reformulation‐linearization method, and a novel Branch‐and‐Bound and Charnes–Cooper transformation method. The proposed models and algorithms are illustrated through two case studies based on Marcellus shale play, in which onsite treatment shows its superiority in improving freshwater conservancy, maintaining a stable water flow, and reducing transportation burden. © 2014 American Institute of Chemical Engineers AIChE J, 61: 1184–1208, 2015     

Flexible design‐planning of supply chain networks

Nowadays market competition is essentially associated to supply chain (SC) improvement. Therefore, the locus of value creation has shifted to the chain network. The strategic decision of determining the optimal SC network structure plays a vital role in the later optimization of SC operations. This work focuses on the design and retrofit of SCs. Traditional approaches available in literature addressing this problem usually utilize as departing point a rigid predefined network structure which may restrict the opportunities of adding business value. Instead, a novel flexible formulation approach which translates a recipe representation to the SC environment is proposed to solve the challenging design‐planning problem of SC networks. The resulting mixed integer linear programming model is aimed to achieve the best NPV as key performance metric. The potential of the presented approach is highlighted through illustrative examples of increasing complexity, where results of traditional rigid approaches and those offered by the flexible framework are compared. The implications of exploiting this potential flexibility to improve the SC performance are highlighted and are the subject of our further research work. © 2009 American Institute of Chemical Engineers AIChE J, 2009     

Integrated shale gas supply chain design and water management under uncertainty

The development of shale gas resources is subject to technical challenges and markedly affected by volatile markets that can undermine the development of new projects. Consequently, stakeholders can greatly benefit from decision-making support tools that integrate the complexity of the system along with the uncertainties inherent to the problem. Accordingly, a general methodology is proposed in this work for the evaluation of integrated shale gas and water supply chains under uncertainty. First, key parametric uncertainties are identified from a candidate pool via a global sensitivity analysis based on a deterministic optimization model. Then, a two-stage stochastic model is developed considering only the key uncertain parameters in the problem. Moreover, the merits of modeling uncertainty and implementing the stochastic solution approach are evaluated using the expected value of perfect information and the value of the stochastic solution metrics. Furthermore, the conditional value-at-risk approach was implemented to evaluate different risk-aversion levels and the corresponding impacts on the shale gas development plan. The proposed methodology is illustrated through two real-world case studies involving six and eight potential well-pad locations and two options of well-pad layouts. © 2018 American Institute of Chemical Engineers AIChE J, 65: 924–936, 2019     

多期生物燃料供应链网络建模与多目标优化

建立了一个基于多目标优化以及生命周期评价（LCA）的多期生物燃料供应链模型。该模型的3个目标函数分别为总折现利润、平均单位能量生物燃料的温室气体排放和化石能源投入（economic,energy,environmental,3E）。为了将生物质生产的季节性以及库存等问题引入模型中,需要对每年进行多期划分。考虑到需要进一步引入供应链的扩张,模型的时间跨度设定为3年。此外,该模型还考虑了生物质产地、工厂,生物燃料市场的选址以及各节点间的物流流量等问题。通过将非线性的后两个目标函数利用ε-constraint法转化为线性约束条件,该模型最终被转化为混合整数线性规划（MILP）问题并得以求解。对解得的非劣解在三维坐标系上线性插值可得非劣解所在曲面,它揭示了3E目标之间的权衡取舍关系。还使用了一个基于中国国情的数据的案例对该模型进行检验。     

Robust design and operations of hydrocarbon biofuel supply chain integrating with existing petroleum refineries considering unit cost objective

This paper addresses the optimal design and planning of the advanced hydrocarbon biofuel supply chain with the unit cost objective. Benefited from the drop-in properties of advanced hydrocarbon biofuels, the supply chain takes advantage of the existing petroleum infrastructure, which may lead to significant capital and transportation savings. A mixed-integer linear programming model is proposed to simultaneously consider the supply chain design, integration strategy selection, and production planning. A robust optimization approach which tradeoffs the performance and conservatism is adopted to deal with the demand and supply uncertainty. Moreover, the unit cost objective makes the final products more cost-competitive. The resulting mixed-integer linear fractional programming model is solved by tailored optimization algorithm. County level cases in Illinois are analyzed and compared to show the advantage of the proposed optimization framework. The results show that the preconversion to petroleum-upgrading pathway is more economical when applying the unit cost objective.     

Optimal design and global sensitivity analysis of biomass supply chain networks for biofuels under uncertainty

Bio-fuels represent promising candidates for renewable liquid fuels. One of the challenges for the emerging industry is the high level of uncertainty in supply amounts, market demands, market prices, and processing technologies. These uncertainties complicate the assessment of investment decisions. This paper presents a model for the optimal design of biomass supply chain networks under uncertainty. The uncertainties manifest themselves as a large number of stochastic model parameters that could impact the overall profitability and design. The supply chain network we study covers the Southeastern region of the United States and includes biomass supply locations and amounts, candidate sites and capacities for two kinds of fuel conversion processing, and the logistics of transportation from the locations of forestry resources to the conversion sites and then to the final markets.To reduce the design problem to a manageable size the impact of each uncertain parameter on the objective function is computed for each end of the parameter's range. The parameters that cause the most change in the profit over their range are then combined into scenarios that are used to find a design through a two stage mixed integer stochastic program. The first stage decisions are the capital investment decisions including the size and location of the processing plants. The second stage recourse decisions are the biomass and product flows in each scenario. The objective is the maximization of the expected profit over the different scenarios. The robustness and global sensitivity analysis of the nominal design (for a single nominal scenario) vs. the robust design (for multiple scenarios) are analyzed using Monte Carlo simulation over the hypercube formed from the parameter ranges.     

Multienterprise supply chain: Simulation and optimization

The advancements in connectivity among the entities belonging to industrial supply chain have given rise to more complex, global supply chain networks. These networks are often constituted of entities that belong to multiple such networks. Interactions among the entities in such networks are also influenced by whether they belong to the same enterprise or different ones. This work takes into consideration the effect of such interactions. The entities belonging to different enterprises are assumed to interact through auctions. An agent based simulation model that incorporates such auctions is used to represent multienterprise supply chain networks. The dynamics of the supply chain affected by the auction mechanism are investigated. Also a derivative free optimization methodology is proposed to find the optimal warehouse capacities for the minimization of total cost. © 2016 American Institute of Chemical Engineers AIChE J, 62: 3392–3403, 2016     

Modular supply chain optimization considering demand uncertainty to manage risk

Supply chain under demand uncertainty has been a challenging problem due to increased competition and market volatility in modern markets. Flexibility in planning decisions makes modular manufacturing a promising way to address this problem. In this work, the problem of multiperiod process and supply chain network design is considered under demand uncertainty. A mixed integer two-stage stochastic programming problem is formulated with integer variables indicating the process design and continuous variables to represent the material flow in the supply chain. The problem is solved using a rolling horizon approach. Benders decomposition is used to reduce the computational complexity of the optimization problem. To promote risk-averse decisions, a downside risk measure is incorporated in the model. The results demonstrate the several advantages of modular designs in meeting product demands. A pareto-optimal curve for minimizing the objectives of expected cost and downside risk is obtained.     

Chemical supply chain modeling for analysis of homeland security events

The potential impacts of man-made and natural disasters on chemical plants, complexes, and supply chains are of great importance to homeland security. To be able to estimate these impacts, we developed an agent-based chemical supply chain model that includes: chemical plants with enterprise operations such as purchasing, production scheduling, and inventories; merchant chemical markets, and multi-modal chemical shipments. Large-scale simulations of chemical-plant activities and supply chain interactions, running on desktop computers, are used to estimate the scope and duration of disruptive-event impacts, and overall system resilience, based on the extent to which individual chemical plants can adjust their internal operations (e.g., production mixes and levels) versus their external interactions (market sales and purchases, and transportation routes and modes). To illustrate how the model estimates the impacts of a hurricane disruption, a simple example model centered on 1,4-butanediol is presented.     

基于条件场景的不确定性石化供应链优化方法

针对产品需求及其价格存在不确定性的石化供应链计划层最优化问题,本文建立了一种基于条件场景的石化供应链最优化方法。用多个离散场景近似随机变量概率的连续分布,根据随机变量的概率分布特征,对场景发生的概率进行参数估计,进而建立了基于场景的两阶段混合整数线性规划(MILP)模型。利用基于场景的优化结果随离散网格数增加而逐渐趋近连续的随机优化结果这一规律,给出了获得最佳离散网格数的方法,实现了计算时间成本与计算精度之间的平衡。在此基础上引入条件概率方法,利用两个随机变量间的相关性,建立了以产品价格及其需求量为不确定性的石化供应链优化方法。结果表明,与传统未考虑随机变量间相关性的一般场景划分方法相比,本文基于条件场景的随机优化方法可以更快地获得最佳场景数目,进而有效降低了计算量。     

A robust possibilistic programming approach for pharmaceutical supply chain network design

In this paper, a bi-objective mixed integer linear programming (BOMILP) model is developed for a pharmaceutical supply chain network design (PSCND) problem. The model helps to make several decisions about the strategic issues such as opening of pharmaceutical manufacturing centers and main/local distribution centers along with optimal material flows over a mid-term planning horizon as the tactical decisions. It aims to concurrently minimize the total costs and unfulfilled demands as the first and second objective functions. Since the critical parameters are tainted with great degree of epistemic uncertainty, a robust possibilistic programming approach is used to handle uncertain parameters. In order to verify and analyze the proposed model, it is tested on a real case study and managerial insights are provided.     

Nationwide energy supply chain analysis for hybrid feedstock processes with significant CO2 emissions reduction

Integrating diverse energy sources to produce cost‐competitive fuels requires efficient resource management. An optimization framework is proposed for a nationwide energy supply chain network using hybrid coal, biomass, and natural gas to liquids (CBGTL) facilities, which are individually optimized with simultaneous heat, power, and water integration using 162 distinct combinations of feedstock types, capacities, and carbon conversion levels. The model integrates the upstream and downstream operations of the facilities, incorporating the delivery of feedstocks, fuel products, electricity supply, water, and CO₂ sequestration, with their geographical distributions. Quantitative economic trade‐offs are established between supply chain configurations that (a) replace petroleum‐based fuels by 100%, 75%, and 50% and (b) utilize the current energy infrastructures. Results suggest that cost‐competitive fuels for the US transportation sector can be produced using domestically available coal, natural gas, and sustainably harvested biomass via an optimal network of CBGTL plants with significant GHG emissions reduction from petroleum‐based processes. © 2012 American Institute of Chemical Engineers AIChE J, 2012     

Inventory policies and safety stock optimization for supply chain planning

In this article, traditional supply chain planning models are extended to simultaneously optimize inventory policies. The inventory policies considered are the (r,Q) and (s,S) policies. In the (r,Q) inventory policy an order for Q units is placed every time the inventory level reaches level r, while in the s,S policy the inventory is reviewed in predefined intervals. If the inventory is found to be below level s, an order is placed to bring the level back to level S. Additionally, to address demand uncertainty four safety stock formulations are presented: (1) proportional to throughput, (2) proportional to throughput with risk-pooling effect, (3) explicit risk-pooling, and (4) guaranteed service time. The models proposed allow simultaneous optimization of safety stock, reserve, and base stock levels in tandem with material flows in supply chain planning. The formulations are evaluated using simulation. © 2018 American Institute of Chemical Engineers AIChE J, 65: 99–112, 2019     

Agent-based supply chain management—2: a refinery application

The refinery business involves tasks that span several departments and process large amount of data. Among others, these include crude procurement, logistics and scheduling (storage, distillation units, etc.). Current refinery decision support systems (DSSs) fail to integrate all the decision-making processes of a refinery, to interface with other systems in place, to incorporate dynamic data from various sources and to assist different departments concurrently. In part 1 of this two-part paper, we proposed an agent-based framework for supply chain DSSs. Here, we demonstrate its application through a prototype DSS, called petroleum refinery integrated supply chain modeler and simulator or PRISMS, for crude procurement. PRISMS serves as a central DSS through which all processes of a refinery can be studied and enables integrated decisions with respect to the overall refinery business. In particular, PRISMS can be used to study the effects of internal policies of the refinery and its various departments. We illustrate this through three detailed ‘what-if’ studies that provide an insight into how the business responds to changes in policies, exogenous events and plant modifications.     

Flexibility analysis of process supply chain networks

One of the key fundamentals for organizations to remain competitive in the present economic climate is to effectively manage their supply chains under uncertainty. The notion of supply chain flexibility attempts to characterize the ability of a supply chain to perform satisfactorily in the face of uncertainty. However, limited quantitative analysis is available. In this work, we utilize a flexibility analysis framework developed within the context of process operations and design to characterize supply chain flexibility. This framework also provides a quantitative mapping to various types of flexibility discussed in the operations research and management science literature. Two case studies are included to illustrate the application of this framework for analyzing the flexibility of existing supply chain processes, as well as utilizing it in supply chain design.     

A mathematical modeling approach for supply chain management under disruption and operational uncertainty

In this work, we proposed a two-stage stochastic programming model for a four-echelon supply chain problem considering possible disruptions at the nodes (supplier and facilities) as well as the connecting transportation modes and operational uncertainties in form of uncertain demands. The first stage decisions are supplier choice, capacity levels for manufacturing sites and warehouses, inventory levels, transportation modes selection, and shipment decisions for the certain periods, and the second stage anticipates the cost of meeting future demands subject to the first stage decision. Comparing the solution obtained for the two-stage stochastic model with a multi-period deterministic model shows that the stochastic model makes a better first stage decision to hedge against the future demand. This study demonstrates the managerial viability of the proposed model in decision making for supply chain network in which both disruption and operational uncertainties are accounted for.     

供应链管理的优化--当前国际企业竞争力的焦点

说明了供应链管理的重要意义,介绍了供应链的定义与构成,类型及其管理软件的应用功能和可解决的问题。