Pharmaceutical supply chain network and competitive distributor location

Abstract

This paper proposes a bi-level, integer programming, and nonlinear model for the competitive location problems in the pharmaceutical supply chain. Existing and candidate distributors compete to successively service customers in competitive supply chain. It proposes a mathematical model for the Darou Pakhsh pharmaceutical supply chain where the upper level tries to propose the best locations for the distributors and the lower level selects the best distributors to cover the demand areas. The proposed mathematical model presents important factors such as the business share of the market and utility to optimise the competitive distributor location in the case study. Decision-makers are also interested in finding the rank list of distributors; therefore, the MADM method, VIKOR, is proposed to select the best distributors among different alternatives according to critical criteria. Finally, sensitivity analysis is used to analyse the effectiveness of the radius of influence of distributors' parameters on the follower objective function.