129. A Stochastic Supplier Portfolio Model Utilizing Conditional Value-at-Risk
Invited abstract in session TC-8: MCDM for project portfolio problems, stream Multiple Criteria Decision Aiding.
Tuesday, 12:30-14:00Room: Clarendon SR 2.08
Authors (first author is the speaker)
| 1. | Garima Mittal
|
| Decision Sciences, Indian Institute of Management Lucknow | |
| 2. | NITIN SAHU
|
| Decision Sciences, Indian Institute of Management (IIM) Lucknow |
Abstract
Supplier selection and order allocation represent critical decision-making processes in supply chain management. These tasks are inherently challenging due to the presence of uncertainties that can significantly affect both efficiency and reliability. Addressing these complexities requires an approach to account for possible risks, thus enhancing the robustness of the supply chain. In this study, we propose a bi-objective supplier selection model under stochastic uncertainty. Specifically, we use an important financial risk management concept, Conditional Value-at-Risk (CVaR), to address the risk associated with the attainment of two objectives, namely total profit and quality levels of the supplier portfolio. The model also integrates several practical constraints expressed as chance constraints to address the uncertainty in parameters. The proposed stochastic model is solved by formulating its deterministic equivalent. The proposed model addresses the operational risks while enhancing the resilience, efficiency, and sustainability of supply chain operations. It further provides a strategic methodology for making resilient supplier selection and order allocation decisions under uncertainty. A numerical illustration highlighting the practical applicability of the proposed model and approach is also provided in the study.
Keywords
- Multi-Objective Decision Making
- Optimization Modeling
- Supply Chain Management
Status: accepted
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