The Structural Design Of Supply Chain Network Based On The Network Diagram

The supply chain network covers all market business activities other thanmanufacturing and consumer. It is the basis structure of the entire market. In themarket environment with increasingly fierce competition, the competition andcoordination of the supply chain has become the main form of the market activity,thus the research of the supply chain network structure has the basis of practicalapplication. The structural design of the supply chain network is the beginning of theactivities of the entire supply chain network, which belongs to the strategic leveldecisions. It puts a direct impact on operating costs, thereby affecting the overalloperational performance of the supply chain network. A suitable structural designoften means a dominant position in the competition. The article aims to exploringthree types of the supply chain network structure from the macro level. In order tosimplify the establishment of the model, the network diagram is used as a basicresearch method. The basic structure of the network diagram is composed by nodesand lines, which the node represent the entity of the supply chain network and the lineindicate the corresponding supply chain activity. It simplifies the supply chainnetwork design into the capacity values and flows of the lines.The paper firstly defines the equilibrium conditions of the supply chain network.The equilibrium condition under certain demand-the conservation of the flow-is usedto build a deterministic supply chain network design model (model1), whoseobjective function is to minimize the total costs. The variation inequality formulationis used to express the optimized conditions, and a set of simulation experiments areset up to verify the practical utility of the model. Secondly, incorporation theuncertainty of the market demand, the assumptions of―short order response‖etc. areused to limit the impact of the uncertainty demand to the level of the distributioncenter. Respectively, a distribution center and a manufacturing center optimizationdecisions model are established, using variation inequality to express its optimalconditions. Then, a supply chain network structure design model with uncertaintydemand is built (model2). The simulation results verify the effectiveness andsimplicity of the uncertainty model (model2). Finally, as the future operatingenvironment can’t be fully predicted, the robust improvement and robust design of thesupply chain network structure have much practical significance. The essence of therobust improvement (re-design) is the adjustment of the lines’ capacities. Theoptimization results of model2can be used as the basis of the robust improvement.The robust supply chain network structure design model (model3) is based on model2, incorporating the uncertainty of the design and conditions parameters. The supplychain network value is used as the objective function of the robust design model(model3). The supply chain network’s risks and its prevention measures are discussedand a brief overview of the specific applications of the robust design model (model3)in the field is presented.