Modeling supply-chain planning under demand uncertainty using stochastic programming: A survey motivated by asset-liability management
We extend the linear programming (LP) model of deterministic supply-chain planning to take demand uncertainty and cash flows into account for the medium term. The resulting stochastic LP model is similar to that of asset-liability management (ALM), for which the literature using stochastic programming is extensive. As such, we survey various modeling and solution choices developed in the ALM literature and discuss their applicability to supply-chain planning. This survey can be a basis for making modeling/solution choices in research and in practice to manage the risks pertaining to unmet demand, excess inventory, and cash liquidity when demand is uncertain.
Year of publication: |
2009
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Authors: | Sodhi, ManMohan S. ; Tang, Christopher S. |
Published in: |
International Journal of Production Economics. - Elsevier, ISSN 0925-5273. - Vol. 121.2009, 2, p. 728-738
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Publisher: |
Elsevier |
Keywords: | Supply chain risk management Risk models Stochastic programming Supply-chain planning Asset-liability management Demand uncertainty Centralized supply-chain planning |
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