Proactive logistics-redistribution strategic planning in response to facility disruptions under contingencies

Abstract

This paper explores the challenges of managing sustainable supply-distribution operations amid facility disruptions. We consider a supply chain network consisting of reliable distribution centers, unreliable distribution centers (prone to disruptions), and customers. Facility disruptions often lead to unexpected capacity reductions, particularly for unreliable distribution centers. This work proposes an analytical two-stage framework to investigate the strategic dynamics of goods sharing among distribution centers in response to facility disruptions under contingencies. The influence of goods sharing strategy on cost-effective management of the supply-distribution operations during potential disruptions is first explored using a game-theoretic model. Next, a scenario-based optimization model is presented to help minimize the logistics re-distribution cost. Further, we extend the model while considering the carbon emission constraints to incorporate the environmental concerns into the transportation process. The proposed optimization model is validated by testing large-sized and real-world problem instances associated with a grocery and general merchandise organization in the United Kingdom. Evidence-based insights and managerial implications are provided to highlight the applicability of the proposed framework.