Stochastic modeling of a two‐echelon multiple sourcing supply chain system with genetic algorithm

Abstract

Purpose

To establish a strategic resource allocation model to capture and encapsulate the complexity of the modern global supply chain management problem.

Design/methodology/approach

A mathematical model was constructed to describe the stochastic multiple‐period two‐echelon inventory with the many‐to‐many demand‐supplier network problem. Genetic algorithm (GA) was applied to derive optimal solutions through a two‐stage optimization process. A practical example and its solution were included to illustrate the GA‐based solution procedure.

Findings

The model simultaneously constitutes the inventory control and transportation parameters as well as price uncertainty factors.

Originality/value

The model can be utilized as a collaborative supply chain strategic planning tool to determine efficiently the appropriate inventory allocation and effectively manage the distribution/re‐distribution process according to real‐time demand.

Citation

Han, C. and Damrongwongsiri, M. (2005), "Stochastic modeling of a two‐echelon multiple sourcing supply chain system with genetic algorithm", Journal of Manufacturing Technology Management, Vol. 16 No. 1, pp. 87-108. https://doi.org/10.1108/17410380510574103