Two-Stage Analysis for Supply Chain Disruptions Considering the Trade-Off Between Profit Maximization and Adaptability

Considering the trade-off between profit maximization and adaptability to supply chain disruptions, we examine herein the decision-making for configuration and distribution plans in a supply chain. Supply chain disruptions are caused by facility accidents and disasters. In this work, we investigate an optimal configuration and distribution plan in the supply chain with disruptions, including the opening of additional facilities while maintaining the optimum supply amounts to customers in the profit maximization plan when no such disruptions occur. Assuming the existence of uncertainties in demands and supplies, we formulate a two-stage model with a simple recourse, in which decisions on the supply chain configuration are made at the first stage. Decisions on the distribution are made at the second stage after the demands and supplies are realized. For such a configuration and distribution in the supply chain, we propose TSA-SCD (Two-Stage Analysis for Supply Chain Disruptions), a novel decision-making framework considering the trade-off between profit maximization and adaptability to supply chain disruptions. Accordingly, we perform numerical experiments with different degrees of disruptions to verify the effectiveness of the proposed decision method.