Effects of Integration on the Cost Reduction in Distribution Network Design for Perishable Products

S. Ariafar,S. H. Tang,N. Ismail,Z. Firoozi,A. Memariani,M. K. M. A. Ariffin

doi:10.1155/2014/739741

Abstract

Perishable products, which include medical and pharmaceutical items as well as food products, are quite common in commerce and industries. Developing efficient network designs for storage and distribution of perishable products plays a prominent role in the cost and quality of these products. This paper aims to investigate and analyze the impact of applying an integrated approach for network design of perishable products. For this purpose, the problem has been formulated as a mixed integer nonlinear mathematical model that integrates inventory control and facility location decisions. To solve the integrated model, a memetic algorithm (MA) is developed in this study. For verification of the proposed algorithm, its results are compared with the results of an adapted Lagrangian relaxation heuristic algorithm from the literature. Moreover, sensitivity analysis of the main parameters of the model is conducted to compare the results of the integrated approach with a decoupled method. The results show that as the products become more perishable, application of an integrated method becomes more reasonable in comparison with the decoupled one.

Highlights

IntroductionMajor categories of perishable products include food products, medicines, pharmaceutical items, and many other plants and industrial goods
Perishable products are very common in industries, commerce, and our daily life [1]
Traditional distribution network design models considered that products can be stored indefinitely in the stocking points of distribution networks

Summary

Introduction

Major categories of perishable products include food products, medicines, pharmaceutical items, and many other plants and industrial goods. These products are only usable during their lifetime; when their lifetime is over, they must be discarded [2]. The most challenging nature of perishable products is their limited lifetimes that must be considered when deciding on the inventory control policies of these products [4,5,6]. Lifetime is not taken into account in previous distribution network design modeling when deciding on inventory control policy of the network. Perishable inventory control has gained much attention in distribution network design literature. Studies by Lesniewski and Bartoszewicz [7], Su et al [8], Drezner and Scott [9], Firoozi et al [10], and Coelho and Laporte [11] are some recent researches in this area

Objectives

Methods

Results

Conclusion