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Profit oriented supply chain network optimization

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  • Turan Paksoy
  • Eren Özceylan
  • Gerhard-Wilhelm Weber

Abstract

This paper proposes a novel mixed integer linear programming model to solve a supply chain network design problem. The proposed model deals with major issues for supply chains; product quality and cost. These issues are usually solved separately, but in this paper, we investigate effects of product quality on supply chain design and transportation flow. A trade-off between raw material quality, its purchasing and reprocessing costs was considered. Assuming decision maker (DM) wishes to work with a supplier which serves a low quality raw material; this raw material should be in need of reprocessing. To avoid the reprocessing costs, a supplier which serves a high quality raw material should be chosen but at this time the DM has to face a high purchasing cost. A supply chain network which consists of multiple suppliers, manufacturers, distribution centers and retailers is tried to be designed to accomplish aforementioned above trade-offs. The paper examines and discusses the relationship between product quality and supply chain design and offers several managerial insights. Copyright Springer-Verlag 2013

Suggested Citation

  • Turan Paksoy & Eren Özceylan & Gerhard-Wilhelm Weber, 2013. "Profit oriented supply chain network optimization," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 21(2), pages 455-478, March.
    • Handle: RePEc:spr:cejnor:v:21:y:2013:i:2:p:455-478
    DOI: 10.1007/s10100-012-0240-0
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    2. Sayan Chakraborty & Akshat Jain & S. P. Sarmah, 2022. "An integrated mathematical model based on grey optimal ranking for supplier selection considering pandemic situation," OPSEARCH, Springer;Operational Research Society of India, vol. 59(4), pages 1613-1648, December.
    3. Aalaei, Amin & Davoudpour, Hamid, 2017. "A robust optimization model for cellular manufacturing system into supply chain management," International Journal of Production Economics, Elsevier, vol. 183(PC), pages 667-679.
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