A Stochastic Model for Perishable Product Production and Distribution with Operation Risks

Abstract

Abstract: The operations of a supply network for short life cycle products are characterized by uncertainties of risks, such as quality risk, delivery risk, production risk, inventory risk, and demand risk. The effect of these risks on the operations of the network is analyzed. Then, an inventory, production, and distribution policy is proposed. With this policy, a stochastic programming model is build. By analyzing the characteristics of the model, based on ILOG CPLEX, a dispatching solution method is developed to solve the problem. With some practical cases, the impact of various risk factors on operation process of the overall supply chain is analyzed. Simulation results show that the obtained inventory strategies are effective and practical.

Key words: supply chain, stochastic programming, production and distribution, perishable products

Liu Kai-fei, Liu Xiao. A Stochastic Model for Perishable Product Production and Distribution with Operation Risks[J]. Industrial Engineering Journal , 2013, 16(1): 38-44.

References

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