Multi objective outbound logistics network design for a manufacturing supply chain

Abstract

Outbound logistics network (OLN) in the downstream supply chain of a firm plays a dominant role in the success or failure of that firm. This paper proposes the design of a hybrid and flexible OLN in multi objective context. The proposed distribution network for a manufacturing supply chain consists of a set of customer zones (CZs) at known locations with known demands being served by a set of potential manufacturing plants, a set of potential central distribution centers (CDCs), and a set of potential regional distribution centers (RDCs). Three variants of a single product classified based on nature of demand are supplied to CZs through three different distribution channels. The decision variables include number of plants, CDCs, RDCs, and quantities of each variant of product delivered to CZs through a designated distribution channel. The goal is to design the network with multiple objectives so as to minimize the total cost, maximize the unit fill rates, and maximize the resource utilization of the facilities in the network. The problem is formulated as a mixed integer linear programming problem and a multiobjective genetic algorithm (MOGA) called non-dominated sorting genetic algorithm--II (NSGA-II) is employed to solve the resulting NP-hard combinatorial optimization problem. Computational experiments conducted on randomly generated data sets are presented and analyzed showing the effectiveness of the solution algorithm for the proposed network.