Opportunistic supply chain formation from qualified partners for a new market demand

S. S. Chauhan, J. M. Proth, A. M. Sarmiento, R. Nagi

Research output: Contribution to journalArticlepeer-review


This paper addresses the problem of short-term supply chain design using the idle capacities of qualified partners in order to seize a new market opportunity. The new market opportunity is characterized by a deterministic forecast over a planning horizon. The production-distribution process is assumed to be organized in stages or echelons, and each echelon may have several qualified partners willing to participate. Partners within the echelon may differ in idle production capacity, operational cost, storage cost, etc, and we assume that idle capacity may be different from one period to another period. The objective is to design a supply chain by selecting one partner from each echelon to meet the forecasted demand without backlog and best possible production and logistics costs over the given planning horizon. The overall problem is formulated as a large mixed integer linear programming problem. We develop a decomposition-based solution approach that is capable of overcoming the complexity and dimensionality associated with the problem. Numerical results are presented to support the effectiveness of this approach.

Original languageEnglish (US)
Pages (from-to)1089-1099
Number of pages11
JournalJournal of the Operational Research Society
Issue number9
StatePublished - Sep 2 2006
Externally publishedYes


  • Heuristics
  • Qualified partners
  • Supply chain formation

ASJC Scopus subject areas

  • Statistics, Probability and Uncertainty
  • Modeling and Simulation
  • Strategy and Management
  • Management Science and Operations Research


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