Abstract

The efficient design of the supply chain network is crucial for good performance and robust functionality. In this paper, the facility location-allocation problem, in the strategic stage of supply chain design, is considered. The problem is studied for a 4-layer supply chain network; suppliers, plants, distribution centers, and demand points (customers). Location decisions are considered in 2 layers; plants and distribution centers. The problem model addresses inventory levels, flow of products, and positions of the customer order decoupling point (CODP), in a multi-period (dynamic) planning horizon. In an earlier study, the problem was formulated as a non-linear integer programming model with a profit maximization objective. In this sequel paper, a solution algorithm is developed to solve the problem based on the successive shortest path (SSP) algorithm. A computational study is conducted, and it shows that the SSP algorithm performs well regarding solution quality and computational time.

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