A quantitative model for optimization and disruption mitigation in a supply chain (Auto parts case study)

Abstract

However, there is a lot of capital and plenty of manpower in the auto spare part industry, the enterprises and supply chains of this industry do not perform well in our country. This research models a three-level supply chain with multiple manufacturers, distribution centers and retailers, to minimize the total cost by taking into account various disruptions. The database of two active car spare parts companies for five strategic products in one year has been used. Then, the mathematical model is analyzed by considering disruptions based on three different sales policies: back orders, lost sales and outsourcing. Besides, to evaluate the performance of the model some numerical examples are used and analyzed to determine that algorithm works. Model solved efficiently by MATLAB software. The results show that the proposed algorithm of this research can neutralize the effect of the disruptions and cause a significant reduction in total cost of the system. The model is useful for helping decision makers to adopt an active approach to maintaining business benefits when disruptions take place in the supply chain.