A Multi Objective Model Integrating Financial and Material Flow in Supply Chain Master Planning

Abstract

Integrated management and coordination of different parts of supply chain (e.g. procurement, production and distribution) result in significant financial benefits. Financial flow alongside with information and material flow are the three essential flows in supply chain which should be planned simultaneously to achieve the maximum possible efficiency. In this paper a master planning model which includes integrated procurement, production and distribution planning for a multi-product supply chain is taken into account. In order to escape from sub-optimality caused from ignoring the financial flow, the proposed model is able to integrate the material and financial flows all through the supply chain. Various financial measures are used to model the financial flow in the concerned problem and goal programing method is applied to effectively control the deviation of these measures from the planned target values. To solve the proposed bi-objective optimization model, an interactive fuzzy solution is used. This approach s is able to generate both balanced and unbalanced efficient solutions based on decision maker preferences. To show the usefulness and effectiveness of the proposed model numerical and comparative experiments are provided. The numerical results endorse the validity and practicability of the rendered model as well as presenting the efficiency and flexibility of the developed approach.

Keywords

• master planning
• financial flow
• goal programming
• fuzzy multi-objective solution approach