Mathematical model for supply chain design with time postponement

Abstract

Designing a supply chain is a major strategic issue due to its impact on efficiency and responsiveness. The design becomes more complex when the goal is to reduce distribution costs and use the time postponement in the supply chain. The mathematical models currently studied in the literature consider various actors involved in the network. However, in real problems there are different combinations of actors, creating own transportation flows and increasing the complexity of a supply chain. This paper proposes a model for designing supply chains with time postponement from a mixed integer non-linear programming formulation to minimize the total costs, considering the transportation, facilities opening and operational costs. The model allows the possibility of a hybrid facility, that is, two kinds of facilities opened in the same place, an important opportunity to saving costs. Some sets of instances were simulated to find the optimal solution of that model and analyze the supply chain behavior in different instances sizes. These scenarios were solved by a commercial solver and its performance was assessed. The model presents feasibility of use for small and medium-sized instances with enough computing time to aid in management decision making.

Keywords

• Suplly chain design
• Time postponement
• Mathematical Model.