A Multi-optimization Approach to Fair Profit Distribution Problem for a Supply Chain Network

The fair profit distribution problem of a typical supply chain network involving batch production is considered in this article. To implement this concept, we construct a multi-product batch production combined with multi-stage distribution planning model to achieve multiple objectives such as maximizing the customer service level, maximizing the profit of each participant company of the supply chain, and ensuring a fair profit distribution. The fuzzy decision-making method is adopted to attain the compromised solution between these conflicting objectives. Therein each objective function is viewed as a fuzzy goal, and a membership function is used to characterize the transition from the objective value to the degree of satisfaction. A two-phase fuzzy optimization method is applied to obtain the compromised solution between all participant companies of the supply chain. One numerical example is supplied, demonstrating that the proposed two-phase method can provide a better compensatory solution for multi-objective problems in a supply chain network.