Alternatives for optimal integration of forest supply chain operations

Abstract

The market dynamics and requirements prompt the competition among individual companies included in a supply chain (SC). It is well-known that all the SC members search to improve its efficiency and increase its competitiveness, and in most cases, the results do not correspond to an equitable distribution among all the members of the achieved benefits. However, SC approaches generally address as a performance measure the profits of the entire system. In this way, a counterpoint arises between the optimality of the overall results and the benefit perceived by each of the participants. In this work, a mixed integer programming model is presented to assess the impact of a solution on the performance of the different SC members. Specifically, the proposed approach evaluates the tactical operations in a forest SC comprising bucking planning at the forest sites and production planning of lumber, electric power and two kinds of boards, each one at its production plant. Besides, through the examples, integration versus individual concerns is appraised for an industry that has increasing conflicts of interest.