Reliability evaluation and adjustment of supply chain network design with demand fluctuations.pdf

Int. J. Production Economics 132 (2011) 131–145 Contents lists available at ScienceDirect Int. J. Production Economics journal homepage: /locate/ijpe Reliability evaluation and adjustment of supply chain network design with demand fluctuations Chaug-Ing Hsu a,n, Hui-Chieh Li b a Department of Transportation Technology and Management, National Chiao Tung University, Hsinchu 300, Taiwan, ROC b Department of Marketing and Logistics Management, Ta Hwa Institute of Technology, Qionglin Shiang, Hsinchu County 307, Taiwan, ROC a r t i c l e i n f o a b s t r a c t Article history: This study focuses on supply chain network design problems by considering economies of scale and Received 20 February 2009 demand fluctuations. A reliability evaluation method is developed to evaluate the performance of Accepted 11 March 2011 plants under demand fluctuations. In addition, two mathematical programming models are developed Available online 29 March 2011 to determine the optimal adjustment decisions regarding production reallocation among plants under Keywords: different fluctuating demands. The judgments to adjust or to do-nothing are investigated by comparing Reliability evaluation the results if the adjustment is made or not made. Results show that making adjustments benefits the Supply chain network design manufacturers by reducing total production cost and avoiding revenue loss, which outweighs the extra Economies of scale