Selection of Primary and Recovery Supply and Demand Portfolios and Scheduling: A Two-Period Approach

A novel two-period modeling approach is developed for supply chain disruption mitigation and recovery, where planning horizon is divided into two aggregate periods: Period 1, before a disruption and Period 2, after the disruption. The corresponding mitigation and recovery decisions are: (1) primary supply and demand portfolios and production before a disruption, and (2) recovery supply, transshipment and demand portfolios, and production after the disruption. The primary and recovery portfolios are determined simultaneously and for the integrated decision-making, a scenario-based stochastic MIP model is developed. The two-period model is compared with a multi-period one to account for a detailed timing of supplies and production. The findings indicate that for both two- and multi-period setting, the developed multi-portfolio approach leads to computationally efficient MIP models with an embedded network flow structure resulting in a very strong linear programming relaxation. The major managerial insights are provided at the end of this chapter.