Supply Chain network design (SCND) is a principle emphasizing the utilization of anrnefficient integrated system of suppliers, producers, warehouses, retailers and customers, sornthat items can be produced and distributed system-wide at the right quantities and rightrnlocations so as to minimize costs and maximize services. It deals with strategic decisionsrnsuch as deciding on the number, location, capacities and technologies of facilities to bernopened, changes to existing facilities and supplier as well as wholesaler or customerrnselection. In addition it includes tactical decisions such as production, shipping plans andrnmaterial flow through the network. The supply chains are complex, dynamic and highlyrnuncertain. Uncertainty in supply chain may take in the form of demand uncertainty(inaccuraternforecasting, seasonality, changes in customer preferences, etc.), supply uncertainty(e.g.rnsupply yields, supply capacities, etc.). rnUnderestimating the impact of uncertainties of supply chain and optimizing under thernassumptions of deterministic parameters is risky. Uncertainties of supply chain should bernexplicitly included in the decision making process. In this paper, a stochastic single objectivernoptimization model have been considered for the supply chain network optimization problemrnunder risk and uncertainty and finally cost effective supply chain network is forwarded. rnThis thesis address the design of four echelon (supplier, plants, warehouse and wholesaler)rnsupply chain network(SCN), where both the plantâ€Ÿs supplier and customer demand arernconsidered to be uncertain and stochastic but other parameters are deterministic and known inrnadvance. This paper proposes a single objective-single product optimization model forrnhandling the inherent uncertainties in the forward supply chain for designing the supply chainrnnetwork problem. A linear programming(LP) model is applied to realize the design of supplyrnchain network problem effectively. First a survey questionnaire on the existence of risk andrnuncertainty to the Ethiopian textile industries, found in Addis Ababa, have been conductedrnso as to have contextual meaning on the literature review towards the Ethiopian textilernindustries context. Then the survey has been analyzed in a way that can be understandablernclearly so that risks to be taken into the model has been prioritized based on the respondentrnrate and finally these with high respondent rate have been modeled into the transportationrncost minimization problem, which considers the shipment cost per kg and capacity(quantity)rnin kg.General Algebraic Modeling System (GAMS 24.8.3) is used as a tool to formulate and solvernthe LP model. A case study of Yirgalem Addis textile factory PLC is taken to demonstraternthe validity of the model. By evaluating the output data, the supply chain network for thisrncase is designed and the optimal product flow and or material flow between the suppliers,rnplant, warehouse and wholesalers is calculated. The result of the optimization model isrncompared to the existing transportation cost of the case company and by the application ofrnthis model about 9% annual cost reduction is achieved. rnFinally a sensitivity analysis of the supply and demand uncertainty have been conducted tornillustrate their impacts on the expected minimum cost. The result of the sensitivity analysisrnshows that the suggested network diagram has a consistency to tolerate the variations inrndemand and supply uncertainty. This contradicts with the case of the deterministicrnenvironments in a way that, the variation in demand and supply will cause the networkrnstructure and this requires another network development. Optimization of the supply chainrnnetwork has great importance in the case of stochastic environment in such a way that, therndeveloped network is tolerable to the demand and supply uncertainty and risk. If there is arnvariation in the supply and demand, the suggested network diagram will not fail easily, it hasrnthe ability to resist these variations of demand and supply uncertainty. Therefore the authorrnconcludes that, optimization of the supply chain network under the assumption ofrndeterministic feature of supply and demand is risky and this may cause to the uncertainty ofrnthe supply chain structure.