A New Methodology for the Design of Robust Supply Chains Based on Orthogonal Arrays DOE and Computer Simulation

Abstract

This paper presents a new approach to estimate supply chain (SC) robustness using fractional factorial design based on orthogonal arrays design of experiments (DOE) and computer simulation. It defines supply chain robustness as a function of the main parameters that set the SC inventory control policy. The new methodology uses Taguchi"s orthogonal arrays to estimate the robustness effect of each parameter in the supply chain. The research considers supply chain robustness as being insensitive to noises to the supply chain design parameters.  Three traditional inventory control policies are considered for a supply chain comprising of a retailer and a manufacturer:     (Q, r), (S, s), and (MA, r).  To estimate the SC performance for each scenario, simulation experiments were performed.  The most robust SC scenario was identified as having the manufacturer operating with (Q,r) and the retailer with (MA,r).