Campus Units

Industrial and Manufacturing Systems Engineering

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

3-10-2021

Journal or Book Title

Research in Engineering Design

Research Focus Area(s)

​Operations Research

DOI

10.1007/s00163-021-00361-0

Abstract

Various studies have discussed the coordination of product and supply chain design decisions for global supply chain management. However, the impact of currency exchange rate uncertainty on the selection of product architectures and their suppliers has not been sufficiently addressed. As a response, this study proposes a two-stage stochastic optimization model in which the first stage determines the product architecture, and the second stage identifies suppliers for the modules and components in an optimal fashion based on the product architecture and uncertain currency exchange rates. The overall objective of two-stage stochastic programming is to determine the optimal product architecture that minimizes the expected total supply chain cost over uncertain currency exchange rate scenarios. The proposed model is applied to a bicycle supply chain case study for three global marketplaces associated with multiple currency exchange rates. The results demonstrate that optimal product architecture and its suppliers should be varied based on currency exchange rates and their uncertain fluctuation levels. Also, a product architecture for the supply chain of each marketplace maintains its optimality in the total supply chain cost, up to a specific exchange rate. The findings show the importance of joint integration between product and supply chain design when considering currency exchange rates. Additionally, the benefit of stochastic modelling is demonstrated by comparing the solution quality of the model with its deterministic counterpart.

Comments

This is a post-peer-review, pre-copyedit version of an article published in Research in Engineering Design. The final authenticated version is available online at DOI: 10.1007/s00163-021-00361-0. Posted with permission.

Copyright Owner

The Author(s)

Language

en

File Format

application/pdf

Available for download on Thursday, March 10, 2022

Published Version

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