In today's highly competitive marketplace, supply chain and product development
activities should be coordinated and synchronized so that market demand, product release
and capacity requirements are matched in a financially sustainable fashion. In this work an
integrated model is developed which incorporates simultaneous treatment of supply chain
design-planning and R&D decisions in the pharmaceutical industry. Moreover, the
aforementioned cross-functional model embeds a capital budgeting formulation enabling the
quantitative assessment of the firms’ value. The model also considers the endogenous
uncertainty associated with product test outcomes during the development process. To tackle
this problem, a scenario based multi-stage stochastic mixed integer linear programming
formulation is proposed. This model includes risk constraints which allow finding optimal
solutions within accepted risk levels. A decomposition technique is applied in order to reduce
the computational effort required for the solution of the monolithic model, thus facilitating
the solution of realistic industrial problems of moderate scale.
CitationLainez, J.; Puigjaner, L.; G-V Reklaitis. Synchronizing new product development projects and supply chain retrofitting for financial sustainability in the pharmaceutical industry. A: 8 th World Congress of Chemical Engineering. "8 th World Congress of Chemical Engineering". Montreal: 2009, p. 1-4.
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