A Mathematical Model For Supply Chain Network Design: Facilities’ Operational Level Consideration

Abstract

In this paper, we deal with a single-item, multi-period capacitated facility location problem where manufacturing plants and distribution centers are decided to be opened or not at the pre-determined potential sites. At each opened facility, we control operational level. If the opened facility operates at a lower minimum requirement volume then penalty cost will occur and add to objective value. If the demand is decreased or fluctuated then the total cost is increased because of opened facilities and operational costs. This information helps the investors and managers to evaluate performance of their SC network system or use outsourcing facilities. The problem is formulated as a mixed integer linear programming (MILP) model with the objective is to minimize the total cost, including transportation cost, inventory holding cost, fixed costs for opening facilities, and penalty costs. Based on the specific structure of the developed model, we need one additional constraint set before using Lagrange relaxation algorithm for solving the problem. Numerical experiments are then conducted to compare the solution of the proposed approach as opposing to the optimal solution obtained by the commercial Lingo solver.

Keywords

• chuỗi cung ứng
• công suất vận hành
• quy hoạch nguyên hỗn hợp
• giải thuật lagrange
• thiết kế mạng.