Development of a Supply Chain Disruption optimization Model

Disruption is one of the causes of supply chain instability that may affect supply chain performance. This paper proposes a Mixed Integer Nonlinear Programming (MINLP) model to analyze a location-allocation problem with supply disruption in a three-echelon network. This study uses (s, S) and (s, Q) inventory policies to manage the inventory. Sourcing strategy is evaluated to create supply chain resiliency. The sourcing policy is conducted by considering single-sourcing and multiple-sourcing. Furthermore, the model also considers environmental effects by calculating carbon emissions resulting from transportation and manufacturing processes. Numerical analysis is evaluated using a Lingo solver. According to the result, implementing multi-sourcing under supply disruption can reduce the total cost of the supply chain by 4 %.