Robust Supply Chain Network Design Considering Facility Damage

Nowadays, the core members of the supply chain, have already recognized the value of acomprehensive long-term supply chain network planning. But most of the planning is in theassumption of that the network always functions properly. However, in recent years, thefrequency of various terrorist attacks as well as natural disasters such as earthquakes,hurricanes, tsunamis and so on is higher and higher, the supply chain network itself hasbecome weaker and weaker and also easily get hurt. From the9/11terrorist attacks to thedevastation caused by disasters, such as Katrina Hurricane, the Wenchuan earthquake and soon, it has been shown that all kinds of damages caused by vandalism or disasters has broughthigher risks to the enterprises, and many companies are indeed suffered huge losses due tosuch destructions of the supply chain network, so it has a strong strategic significance that isthe research on how to make the supply chain can maintain normal operation function andensure the overall cost and income would not have significant deviation, when its network isdestroyed, and also the research on the robustness of supply chain networks.In the foundation of analysis of the domestic and international supply chain networkresearch, it is designed in this paper that a robust supply chain network considering thepossibility of facility damage,which is a supply network which can perform very well undernormal condition and also run with a not very high cost when damages happen. A networkdesign model is proposed based on the network presented. In the model, we reduce the risk oflogistics network by robust optimization rule and also minimize the cost of the network undernormal circumstance. Then Lingo software is adopted to test the model to ensure its reliability.A genetic algorithm achieved by Matlab is designed to solve the model. At last an example isused to illustrate the performance of the genetic algorithm for solving the model. The resultsare as followed that are received from comparing the robust supply chain network and thegeneral supply chain network. The maximum relative regret value of all the scenes is greatlyreduced in the robust supply chain network designed in this paper, though the cost of therobust supply chain network under normal circumstance is higher than that of the generalnetwork，which means that in the robust supply chain network the impact of facility damages is flatted and the risk to supply chain subject to facility damages is reduced, though theOptimal cost in the robust network supply chain is higher than the optimal cost in the generalsupply chain network.