A design model and a production–distribution and inventory planning model in multi-product supply chain networks

Abstract

Supply chain network (SCN) design implicates decision-making at a strategic level. That includes selecting the right suppliers and determining the number and the location of plants, distribution centres and retailers. An apt design model of the supply chain is imperative for the proper function of the supply chain and consequently for making better operational decisions in an attempt of a continuous improvement. In this paper, we propose two models. The first model is a mixed-integer linear programming model which is concerned with the SCN design problem, whereas the second operational model is a mixed-integer non-linear programming model in respect to the production–distribution and inventory planning problem in a supply chain network. The number of customers and suppliers as well as their demand and capacities are assumed to be known in both models. Two steady-state genetic algorithms were implemented in MATLAB in order to solve both the design and the operational model. The results were compared with GAMS. Some examples were devised in order to demonstrate potential ways of use for the designer of the supply chain network, as well as for the supply chain manager.