An integrated model of supply chain resilience considering supply and demand uncertainties

Abstract

The complexity of the global supply chain has increased dramatically over the past few decades as a result of uncertainty caused by various factors. This paper studies the optimal strategy for supply chain resilience models considering supply disruptions and demand fluctuations. We present two‐stage stochastic programming models based on different scenarios, including a risk‐neutral model that considers the expected total cost, a risk‐averse model that considers the conditional value‐at‐risk measure, and a responsiveness model that considers the service level. We also propose multiobjective mathematical programming that considers all three models simultaneously and suggests the solution approach. Finally, we present the results of computational experiments and demonstrate how to cope with uncertainty through flexibility and redundancy. We offer a set of nondominated solutions from the multiobjective model and derive managerial insights, which suggest a decision‐making strategy between the disruption risk, expected total cost, and service level.