Reliable Supply Chain Network Design and Fortification. A Case Study on Luxury Fashion Retail in Thailand

As a result of changing weather conditions and unpredictable natural disasters, many supply chains in Asia face frequent disruptions. This paper presents a scenario based optimization model applied to the luxury fashion retail industry of Thailand. In this model, the limited fortification budget available enables the fortification of warehouse facilities built in candidate locations, while maintaining inventory and efficient transportation across facilities in order to serve the demand at retailers. The fortification budget protects the supply chain and allows it to be more reliable even under the disruptive influence of flooding The computational results imply that increments in fortification budget can reduce the overall costs of the supply chain in different quantities, resulting different impacts. Also the analysis of all possible scenarios when making supply chain decisions, makes the supply chain network operations more profitable and less risky.