Data Envelopment Analysis Approaches for Multiperiod Two-Level Production and Distribution Planning Problems

Abstract

This paper deals with two-level production and distribution planning problems in supply chain management where the leader is a distributor and the follower is a manufacturer. Assuming that the distributor can observe the input–output data in the production process, we formulated the data envelopment analysis (DEA) production problem corresponding to the production planning problem of the manufacturer. This paper proposes a novel data envelopment analysis (DEA) approach to solve a challenging multiperiod two-level production and distribution planning problem in supply chain management. The innovative idea behind the proposed approach is to allow the distributor to observe the input–output data regarding the production activities of the manufacturer, even if the distributor cannot fully comprehend all parameters of the manufacturer’s production cost minimization problem. This approach addresses the challenge of uncertain demands by employing a two-stage model with simple recourse and considering the usage of the input–output data. The paper demonstrates the validity of the proposed DEA approaches through computational experiments and discusses the accuracy, reliability, and importance of the input–output data. The proposed approach provides a practical and effective solution to the multiperiod two-level production and distribution planning problem in supply chain management, and can help decision-makers improve the efficiency and effectiveness of their operations. The innovative idea of allowing the distributor to observe the input–output data about the production activities of the manufacturer is a significant contribution to the field of supply chain management and has the potential to advance the state of the art in this area.