12-17-21

Supply chains are usually optimized to achieve the highest profitability and efficiency, lowest cost and just-in-time delivery. When the world behaves as expected, uncertainties/risks are mostly ignored, and this delivers good profits.

Complex production and supply-chain planning are handled by linear programming optimization. Plans are defined by countless parameters, thus as one point in a very high-dimensional space. The optimum is found by minimizing a (linear) objective function of many parameters given many constraints. It always lies at an outer edge of the high-dimensional subspace allowed by the constraints. Such a solution is never robust. Small parameter changes can cause large plan changes.

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