Supply chain design under quality disruptions and tainted materials delivery

•We focus on supply quality disruptions that result in producing tainted materials.•We design a supply chain to prevent risk of sending tainted material to consumers.•We develop several heuristics and metaheuristic to solve large size problems.•We consider new idea of facility inspection as a recent FDA requirement in some SC.•Presented model enables practitioners to select the most qualified suppliers.

Events such as the 2008 Heparin tragedy, in which patients lost their lives due to tainted pharmaceuticals, highlight the necessity for supply chain designers and planners to consider the risk of even low probability incidents in supply chains. The goal of this research is to design a single-period, single-product supply chain model with capacitated facilities to hedge against the possibility of sending tainted materials to consumers. Given that our mixed-integer stochastic model is NP-hard, we develop efficient heuristic and metaheuristic algorithms to obtain acceptable solutions. Computational experience is presented and discussed.