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Mathematical Problems in Engineering
Volume 2015 (2015), Article ID 469198, 13 pages
http://dx.doi.org/10.1155/2015/469198
Research Article

Global Production Planning Process considering the Supply Risk of Overseas Manufacturing Sites

1Asia Pacific School of Logistics, Inha University, 100 Inha-ro, Nam-gu, Incheon 402-751, Republic of Korea
2Korea Institute for Defense Analyses, 37 Hoegi-ro, Dongdaemun-gu, Seoul 130-871, Republic of Korea

Received 24 May 2015; Revised 16 July 2015; Accepted 6 August 2015

Academic Editor: Davide La Torre

Copyright © 2015 Hosang Jung and Seungbae Sim. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Although global manufacturers can produce most of their final products in local plants, they need to source components or parts from desirable overseas manufacturing partners at low cost in order to fulfill customer orders. In this global manufacturing environment, capacity information for planning is usually imprecise owing to the various risks of overseas plants (e.g., foreign governments’ policies and labor stability). It is therefore not easy for decision-makers to generate a global production plan showing the production amounts at local plants and overseas manufacturing facilities operated by manufacturing partners. In this paper, we present a new global production planning process considering the supply risk of overseas manufacturing sites. First, local experts estimate the supply capacity of an overseas plant using their judgment to determine when the risk could occur and how large the risk impact would be. Next, we run a global production planning model with the estimated supply capacities. The proposed process systematically adopts the qualitative judgments of local experts in the global production planning process and thus can provide companies with a realistic global production plan. We demonstrate the applicability of the proposed process with a real world case.