A multi-objective simulation-based decision support tool for wine supply chain design and risk management under sustainability goals

Abstract

Sustainable Supply Chain Network Design (SCND) poses a complex challenge, as it often requires trade-offs in decision-making. The problem becomes even more challenging when there is a need to integrate risk management into the design process. It is steered by this challenge that the purpose of the paper is twofold. First, it proposes a Simulation-Based Decision Support System (SBDSS) for a real case study of a Portuguese wine SCND problem. Second, it analyzes different wine Supply Chain (SC) configurations under risk situations and sustainability objectives. The main contributions of this research are as follows. First, it concerns the method that was employed, which, contrarily to traditional approaches in literature (e.g., stochastic or genetic programming), consists of a simulation approach, in which agents and their interactions in an environment with uncertainty are modeled. Second, for the generation of non-dominated solutions, a simheuristic was employed, which combines multi-objective optimization with simulation. Finally, the type of industry that was considered, due to the lack of cases focusing on it in literature. The results suggest that the proposed approach determines a set of Pareto-front solutions that consider the sustainability dimensions of SCND, as well as risk situations. Furthermore, the implications that several parameters have on the sustainability of the designed SCs were assessed, as well as the impacts that the considered risks have on the performance of SCs. In particular, it was found that transportation risks impacted considerably more the performance of the SC than the risks on the prices of energy and raw materials.