Zugang Liu

Supply chain networks with global outsourcing and quick-response production under demand and cost uncertainty

This paper develops a modeling and computational framework for supply chain networks with global outsourcing and quick-response production under demand and cost uncertainty. Our model considers multiple off-shore suppliers, multiple manufacturers, and multiple demand markets. Using variational inequality theory, we formulate the governing equilibrium conditions of the competing decision-makers (the manufacturers) who are faced with two-stage stochastic programming problems but who also have to cooperate with the other decision-makers (the off-shore suppliers). Our theoretical and analytical results shed light on the value of outsourcing from novel real option perspectives. Moreover, our simulation studies reveal important managerial insights regarding how demand and cost uncertainty affects the profits, the risks, as well as the global outsourcing and quick-production decisions of supply chain firms under competition.

Sustainable Supply Chain and Transportation Networks

ABSTRACT In this paper, we show how sustainable supply chains can be transformed into and studied as transportation networks. Specifically, we develop a new supply chain model in which the manufacturers can produce the homogeneous product in different manufacturing plants with associated distinct environmental emissions. We assume that the manufacturers, the retailers with which they transact, as well as the consumers at the demand markets for the product are multicriteria decision-makers with the environmental criteria weighted distinctly by the different decision-makers. We derive the optimality conditions and the equilibrium conditions, which are then shown to satisfy a variational inequality problem. We prove that the supply chain model with environmental concerns can be reformulated and solved as an elastic demand transportation network equilibrium problem. Numerical supply chain examples are presented for illustration purposes. This paper, hence, begins the construction of a bridge between sustainable supply chains and transportation networks.

Optimal endogenous carbon taxes for electric power supply chains with power plants

In this paper, we develop a modeling and computational framework that allows for the determination of optimal carbon taxes applied to electric power plants in the context of electric power supply chain (generation/distribution/consumption) networks. The adoption of carbon/pollution taxes both internationally and regionally has been fueled by global climate change and fuel security risks, with a significant portion of such policy interventions directed at the electric power industry. The general framework that we develop allows for three distinct types of carbon taxation environmental policies, beginning with a completely decentralized scheme in which taxes can be applied to each individual power generator/power plant in order to guarantee that each assigned emission bound is not exceeded, to two versions of a centralized scheme, one which assumes a fixed bound over the entire electric power supply chain in terms of total carbon emissions and the other which allows the bound to be a function of the tax. The behavior of the various decision-makers in the electric power supply chain network is described, along with the three taxation schemes, and the governing equilibrium conditions, which are formulated as finite-dimensional variational inequality problems. Twelve numerical examples are presented in which the optimal carbon taxes, as well as the equilibrium electric power flows and demands, are computed. The numerical results demonstrate, as the theory predicts, that the carbon taxes achieve the desired goal, in that the imposed bounds on the carbon emissions are not exceeded. Moreover, they illustrate the spectrum of scenarios that can be explored in terms of changes in the bounds on the carbon emissions; changes in emission factors; changes in the demand price functions, etc.

Financial Networks with Intermediation and Transportation Network Equilibria: A Supernetwork Equivalence and Reinterpretation of the Equilibrium Conditions with Computations

In this paper, we consider two distinct classes of network problems – financial networks with intermediation and with electronic transactions and transportation network equilibrium problems, which have been modeled and studied independently. We then prove that the former problem can be reformulated as the latter problem through an appropriately constructed abstract network i.e., a supernetwork. The established equivalence allows one to then transfer the methodological tools, in particular, algorithms, that have been developed for transportation network equilibria to the financial network domain. In addition, this connection provides us with a novel interpretation of the financial network equilibrium conditions in terms of paths and path flows and a direct existence result. We further show how the theoretical results obtained in this paper can be exploited computationally through several numerical examples.

An Evolutionary Variational Inequality Formulation of Supply Chain Networks with Time-Varying Demands

This paper first develops a multitiered supply chain network equilibrium model with fixed demands and proves that the governing equilibrium conditions satisfy a finite-dimensional variational inequality. The paper then establishes that the static supply chain network model with its governing equilibrium conditions can be reformulated as a transportation network equilibrium model over an appropriately constructed abstract network or supernetwork. This identification provides a new interpretation of equilibrium in supply chain networks with fixed demands in terms of path flows. The equivalence is then further exploited to construct a dynamic supply chain network model with time-varying demands (and flows) using an evolutionary (time-dependent) variational inequality formulation. Recent theoretical results in the unification of projected dynamical systems and evolutionary variational inequalities are presented and then applied to formulate dynamic numerical supply chain network examples and to compute the curves of equilibria. An example with step-wise time-dependent demand is also given for illustration purposes.