Cost optimization strategy and robust control strategy for dynamic supply chain system

Uncertainty and lead time (LT) make supply chain (SC) system present dynamic characteristics. In order to maintain low cost and stability in the operation of dynamic SC system, a cost optimization strategy (COS) and a robust control strategy (RCS) are investigated. A cost model of LT reduction is set up through the method of piecewise accumulation, and then a COS is designed by the comparison between the LT reduction cost and the shortage cost. By considering production LTs and uncertainties of the external demand and internal parameter for dynamic SC system, an inventory state transition equation and a system cost transition equation are developed. Based on the fuzzy control theory, a RCS is designed to reduce the interference of uncertainties and LTs to the normal operation of the dynamic SC system. Simulation results show that the COS and the RCS can make the dynamic SC system run stably at low cost under disturbance factors.

Automated summary

This study investigates a cost optimization strategy and a robust control strategy to maintain low cost and stability in a dynamic supply chain system. The findings suggest that by reducing the interference of uncertainties and lead time on the system operation, it is possible to achieve stable operation at low cost.