Optimization of pharmaceutical supply chains: Navigating disruptions and operational uncertainty utilizing risk measures

Abstract

Operational uncertainties and disruptions present significant challenges in maintaining the resilience and sustainability of pharmaceutical supply chains. Ensuring efficient operations, minimizing emissions, and enhancing distribution reliability are essential for sustainable supply chain performance. This work examines the challenges posed by uncertainty and disruption in the pharmaceutical supply chain, utilizing stochastic optimization and downside risk to formulate mitigation strategies. Specifically, the study compares the solutions of risk-neutral and risk-averse objectives across three key areas: cost, environmental impact, and service level. Solutions from each approach highlight trade-offs: the risk-neutral solution offers better objective values, while the risk-averse one ensures robustness across scenarios but at a higher cost. The multiobjective analysis demonstrates that considering risk is advantageous, as the benefits of robustness outweigh the associated costs. Overall, the results highlight that risk-averse optimization offers strategic advantages for developing robust and sustainable pharmaceutical supply chains in the face of uncertainty and disruption.