Sourcing and outsourcing of materials and services in chemical supply chains

Abstract

Sourcing and Outsourcing of materials and services is an integral part of chemical supply chain management. In this work, we develop an agent based platform that models the functions and activities within a supply chain for efficient decision support. We propose a relatively comprehensive classification of material supply contracts and address the strategic and integrated sourcing and distribution of materials in a global business environment for a MNC, which are key planning decisions in many supply chains including the chemical. We present a systematic and quantitative decision-making formalism to address the integrated logistics needs of a MNC in a global business environment. The formalism involved a novel representation of logistics activities in terms of a recipe superstructure and a static MILP model based on that to select the optimal contracts that minimize the total logistics cost. Later, we extend these deterministic models for uncertain environment using scenario based approach.