Towards a multi-objective performance assessment and optimization model of a two-echelon supply chain using SCOR metrics

Abstract

This paper aims at multi-objective performance assessment and optimization of a multi-period two-echelon supply chain consisting of a supplier and a manufacturer. On the basis of the assessment system of the supply-chain operations reference model, the supply chain’s performance is investigated with respect to costs, assets, agility, reliability and responsiveness. First, methods to quantify these five performance attributes are put forward. Then a multi-objective mathematical programming model is developed for production decision making of components and products so that the supply chain’s performance frontier formed with Pareto efficient performance values can be achieved. Thereafter a simple augmented ϵ constraint method is proposed for searching for all Pareto efficient solutions of the multi-objective mathematical programming problem. Finally, efficiency of the method is demonstrated with a numerical example and a sensitivity analysis is implemented to reveal effects of capacity expansion on supply chains’ performance.