Table of Contents Author Guidelines Submit a Manuscript
Scientific Programming
Volume 2016, Article ID 3848520, 15 pages
Research Article

Supply Chain Network Design under Demand Uncertainty and Supply Disruptions: A Distributionally Robust Optimization Approach

School of Business Administration, Northeastern University, No. 195, Chuangxin Road, Hunan New District, Shenyang, Liaoning 110169, China

Received 24 May 2016; Revised 6 August 2016; Accepted 22 September 2016

Academic Editor: Xiaofeng Xu

Copyright © 2016 Ruozhen Qiu and Yizhi Wang. 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.


We develop a robust optimization model for designing a three-echelon supply chain network that consists of manufacturers, distribution centers, and retailers under both demand uncertainty and supply disruptions. The market demands are assumed to be random variables with known distribution and the supply disruptions caused by some of the facilities faults or connection links interruptions are formulated by several scenarios with unknown occurrence probabilities. In particular, we assume the probabilities that the disruption scenarios happen belong to the two predefined uncertainty sets, named box and ellipsoid uncertainty sets, respectively. Through mathematical deductions, the proposed robust SCN design models can be transformed into the tractable linear program for box uncertainty and into second-order cone program for ellipsoid uncertainty. We further offer propositions with proof to show the equivalence of the transformed problems with the original ones. The applications of the proposed models together with solution approaches are investigated in a real case to design a tea supply chain network and validate their effectiveness. Numerical results obtained from model implementation and sensitivity analysis arrive at important practical insights.