Computing Optimal Mitigation Plans for Force-Majeure Scenarios in Dynamic Manufacturing Chains

Abstract

AbstractWe consider force-majeure supply disruptions in a dynamic, multi-product manufacturing supply chain with time-dependent parameters. We present a linear programming model that captures a specific force-majeure scenario with respect to several objective functions that can be combined in a multi-objective framework, e.g., minimization of loss, maximization of shortage-free time, or prioritization of mitigation types. Solving this model yields an optimal mitigation plan that describes how to best (re-)allocate supply and production operations. Supported mitigation options include plant-side safety stock, supplier-side inventories, and additional production thus reflecting the manufacturing setting of a large-scale industrial player. We describe a workflow for increasing the resilience of supply chains based on risk profiles generated by our approach.