Multi-Period Multi-Product Distribution Network Redesign under Uncertainty

– Reviewing related studies to supply chain networks shows that various factors influence the supply chain network's optimal design. Demand changes in market zones, changes in customers' locations, various competitive conditions in different regions, network costs fluctuations, and different disruption pose risks to the supply chain network in terms of optimal condition. In such conditions, to help the network return to its optimality, the network needs to be redesigned. In this respect, this paper has formulated a multi-period multi-product mathematical model for redesigning the warehouses considering backorder shortage. In this regard, decisions such as the construction of new facilities, closing non-optimal facilities, increasing the active facilities' capacity, the optimal amount of order/shortage in each active warehouse in each period have been investigated. Due to the inherent uncertainty in real-world business, parameters related to cost and demand are considered uncertain. Then, to deal with uncertain parameters in the proposed model, Jimenez's possibilistic programming has been used. The obtained results show that redesigning the supply chain network by setting up new facilities/closing non-optimal facilities can significantly reduce inventory and transportation costs and shortages.