A Robust Model for Supplier Selection and Inventory Management in a Discrete Space

Uncertainty in the form of demand fluctuation has been determined as one of the most affecting sources of risk in supply chain management problems. This paper aims to determine the optimal supplier selection, order allocation, and synchronizing delivery process of a single product in a supply chain with several suppliers and a single buyer considering uncertain demand. The assumption regarding the inventory scheme contributes to the complexity of the model. The proposed model considers the total cost of the whole supply chain under demand sets related to different economic situations. A robust model is then proposed using a convex nonlinear scenario-based stochastic programming with the objective of minimizing the total system expected cost. Finally, we conduct several numerical studies to evaluate the performance of the proposed model and study the effect of variation of the scenario set data on the model outputs.