Global optimization algorithm for multi-period design and planning of centralized and distributed manufacturing networks

Abstract

This paper addresses the design and planning of manufacturing networks considering the option of centralized and distributed facilities, taking into account the potential trade-offs between investments and transportation. The problem is formulated as an extension of the Capacitated Multi-facility Weber Problem, which involves the selection of which facilities to build in each time period, and their location in the continuous two-dimensional space, in order to meet demand and minimize costs. The model is a multi-period GDP, reformulated as a nonconvex MINLP. We propose an accelerated version of the Bilevel Decomposition by Lara et al. (2018) that finds stronger bounds in the decomposition scheme. We benchmark the performance of our algorithm against the original Bilevel Decomposition and commercial global solvers and show that our approach outperforms the others in all instances tested. Additionally, we illustrate the applicability of the proposed model and solution framework with a biomass supply chain case study.