Supply chain modelling using fuzzy sets

This paper considers a production supply chain (SC) with all facilities in a serial connection. The SC includes inventories and production facilities between them. It is assumed that the SC operates in an uncertain environment. Uncertainty is associated with: (1) customer demand, (2) supply deliveries along the SC and (3) external or market supply. Uncertainties are described by vague and imprecise phrases that are interpreted and represented by fuzzy sets. The SC fuzzy model described in this paper is developed to determine the order quantities for each inventory in the SC in the presence of uncertainties, that give an acceptable service level of the SC at reasonable total cost. Two control concepts of the SC are treated: (1) decentralized control of each inventory and (2) partial coordination in the inventories control. A special purpose simulator has been developed for examining the dynamics and performance of all the parts of the SC and the SC as a whole. Various simulation tests have been carried out to assess particularly the effects of uncertain external supply on the SC service level. Different approaches to improve SC performance in an uncertain environment have been simulated and analyzed.