Capacitated supply chain: an optimisation model

Abstract

An optimisation model is introduced along with the solution algorithm for the supply chain problem where the manufacturers make and deliver different products to the retailers through a logistic service provider (LSP) via different hubs of distribution centres. The model's objective is to maximise the manufacturers' total revenues subject to the LSP capacities. The solution algorithm depends on the lead time as a major drive to optimise the manufacturing rates. The model can be of great importance to fast response supply chain environment in which lead times and demands are easily conveyed to the manufacturers such as food, beverages, pharmaceutical drugs, chemicals, and many other perishable items. To demonstrate the merits of the present model, numerical analysis and simulation experiments of different supply chain topologies are presented. The results demonstrate the capability of the model to maximise the manufactures revenues in a decentralised manner.