A NOVEL OPTIMIZATION MODEL FOR SIMULTANEOUS COST-RISK REDUCTION IN MULTI-SUPPLIERS JUST-IN-TIME SYSTEMS

In today’s competitive global markets, Just-in-Time (JIT) is one of the main lean manufacturing approaches. It is used in organizations to improve performance and reduce costs and as a strategic core capability to ensure their market position. However, using JIT tightly couples various functions of the Supply Chain and increases the risk of propagating disruptions through the entire system. This study presents an ordering strategy for the supply of raw materials to the production system to meet customer satisfaction. A general model for cost-risk reduction is developed embracing multiple external and local backup suppliers. The outcomes from this model will be used to obtimise the simultaneous cost/risk reduction within JIT systems. The effectiveness of the developed model will be validated using a simplified example.