A bi-level programming model for supply chain network optimization with assembly line balancing and push–pull strategy

Abstract

This article investigates how to simultaneously optimize both strategic and tactical decisions in the supply chain network design. For this purpose, a bi-level programming model is developed in which supply chain network design problem is considered as a strategic decision in the upper-level model, while the lower-level model contains the assembly line balancing as a tactical decision. In addition, the problem is extended to include push–pull strategy where decisions such as production amount and inventory level of each component in manufacturers are made. Based on the special structure of the model, a heuristic method is proposed to solve the developed bi-level model. A numerical example is employed to show the performance of proposed method in terms of feasibility and convergence. Finally, computational experiments on several problem instances are presented to demonstrate the applications of developed model and the solution method.