Amin CHAABANE, École de Technologie Supérieure, amin.chaabane.1@ens.etsmtl.ca

Amar RAMUDHIN, École de Technologie Supérieure

Marc PAQUET, École de Technologie Supérieure

Supply Chain Management (SCM) has become a strategic factor for companies to acquire competitive advantages. Traditional decision support systems for SCM usually try to solve sourcing, production, distribution and transportation decisions with a focus on profit maximisation (or cost minimization) subject to technological and customer service constraints. The model is usually formulated as a single objective function. However, real life supply chain optimization involves a trade-off between different and sometimes conflicting objectives. Multi-criteria decision making techniques have been used to solve a range of real world problems in management science and specific SCM problems (e.g. supply chain design and reconfiguration, purchasing, scheduling, supplier selection). The results obtained are encouraging. Nevertheless, robust approaches for solving multi-criteria supply chain problems are still in progress, and more research is needed before an effective and operational framework can be developed.
The proposed paper introduces a two-phase hierarchical approach to solve a multi-criteria SCM problem integrating both strategic and tactical decisions where the supply chain is evaluated based on the Supply Chain operations Reference (SCOR) model. The latter considers various metrics such as delivery reliability, flexibility, responsiveness, and cost. The first phase evaluates different configurations of supply chains using Analytic Hierarchy Process (AHP) a well-known multi-criteria technique based on decision makers preferences. The second phase solves the network for the optimal safety stock placement using dynamic programming. The output from this two-phase process is a supply chain network configuration that has the right amount of safety stocks, in the right quantities at the right place to absorb variability in demand.