A stochastic mixed integer programming formulation is proposed for integrated supplier selection and production and distribution scheduling in the presence of supply chain disruption risks. The suppliers are located in different geographic regions and the supplies are subject to multi-level local disruptions of each supplier individually and to two-level regional disruptions of all suppliers in the same region. The two conflicting objectives are considered: expected cost and expected service level, and optimized simultaneously using the weighted- sum aggregation approach. Numerical examples are presented and some managerial insights are reported. The main findings indicate that the service-oriented supply portfolio is more diversified than the cost-oriented portfolio. For the minimum cost objective the cheapest supplier from among the most reliable suppliers is usually selected, while for the maximum service level objective most reliable and most expensive suppliers dominate in the supply portfolio.
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