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A stochastic programming approach for supply chain network design under uncertainty. (English) Zbl 1075.90010
Summary: This paper proposes a stochastic programming model and solution algorithm for solving supply chain network design problems of a realistic scale. Existing approaches for these problems are either restricted to deterministic environments or can only address a modest number of scenarios for the uncertain problem parameters. Our solution methodology integrates a recently proposed sampling strategy, the sample average approximation (SAA) scheme, with an accelerated Benders decomposition algorithm to quickly compute high quality solutions to large-scale stochastic supply chain design problems with a huge (potentially infinite) number of scenarios. A computational study involving two real supply chain networks are presented to highlight the significance of the stochastic model as well as the efficiency of the proposed solution strategy.

MSC:
90B10 Deterministic network models in operations research
90C15 Stochastic programming
Software:
CPLEX; SUTIL
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