An approach to management of Multilevel Distribution Systems for consumer goods and chemicals industry under information uncertainty

In this paper, a value chain is a network of facilities that performs the function of procurement of materials, transformation of materials and distribution of finished products to customers. Different sources of uncertainty exist along a value chain. Stocks are often used to protect the network from such uncertainties. The organizational structure and barriers within it introduce additional complexity in the management of material flows through a chain. In particular, the information can be restricted or costly so that a flexible, robust and complete centralized control/management of the chain may not be feasible. This has motivated the development and application of a probabilistic model for control and management of value chain and in this paper it is Shown how this model can be used in strategic redesign/operation of the existing chains and also in the projects leading to new product introduction. The use of such model allows analyses of the impact of market demand changes induced by competitive behaviour, changes in the structural design of the chain, changes in transportation mode, and changes in production capacity of chain. (C) 1998 Published by Elsevier Science Ltd. All rights reserved.