Supply Chain Modelling Under Uncertainty: A Supplier’s Perspective

Abstract

One of the main challenges in supply chain management is to manage uncertainties within its environment, which yields increased total operational costs. Hence, there is a need to consider all the aspects that are responsible for uncertainties in supply chain management environment. There has been increasing dependence on supplier’s side that triggers companies more prone to risk and uncertainties. This chapter considers all the uncertainty factors from supplier’s perspective in supply chain management. The major factors are production, transportation, inventory, penalty and discounts. Thus, a supply chain model is established that explicitly incorporates all the factors responsible for the uncertainty from supplier’s side in supply chain environment. The problem objective is to minimize overall cost considering demand satisfaction and profit. The chapter also highlights the root causes of uncertainty and various modelling approaches used in supply chain under uncertainty.