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A supply chain design problem with facility location and bi-objective transportation choices

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  • Elias Olivares-Benitez

    ()

  • José González-Velarde

    ()

  • Roger Ríos-Mercado

    ()

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    Abstract

    A supply chain design problem based on a two-echelon single-product system is addressed. The product is distributed from plants to distribution centers and then to customers. There are several transportation channels available for each pair of facilities between echelons. These transportation channels introduce a cost–time tradeoff in the problem that allows us to formulate it as a bi-objective mixed-integer program. The decisions to be taken are the location of the distribution centers, the selection of the transportation channels, and the flow between facilities. Three variations of the classic ε-constraint method for generating optimal Pareto fronts are studied in this paper. The procedures are tested over six different classes of instance sets. The three sets of smallest size were solved completely obtaining their efficient solution set. It was observed that one of the three proposed algorithms consistently outperformed the other two in terms of their execution time. Additionally, four schemes for obtaining lower bound sets are studied. These schemes are based on linear programming relaxations of the model. The contribution of this work is the introduction of a new bi-objective optimization problem, and a computational study of the ε-constraint methods for obtaining optimal efficient fronts and the lower bounding schemes. Copyright Sociedad de Estadística e Investigación Operativa 2012

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    Bibliographic Info

    Article provided by Springer in its journal TOP.

    Volume (Year): 20 (2012)
    Issue (Month): 3 (October)
    Pages: 729-753

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    Handle: RePEc:spr:topjnl:v:20:y:2012:i:3:p:729-753

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    Related research

    Keywords: Integer programming; Bi-objective programming; Location; Supply chain; Branch and bound; ε-constraint method; 90-08; 90B06; 90B10; 90B80; 90C11; 90C29;

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    References

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    1. Wilhelm, Wilbert & Liang, Dong & Rao, Brijesh & Warrier, Deepak & Zhu, Xiaoyan & Bulusu, Sharath, 2005. "Design of international assembly systems and their supply chains under NAFTA," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(6), pages 467-493, November.
    2. Vidal, Carlos J. & Goetschalckx, Marc, 1997. "Strategic production-distribution models: A critical review with emphasis on global supply chain models," European Journal of Operational Research, Elsevier, vol. 98(1), pages 1-18, April.
    3. Alfred A. Kuehn & Michael J. Hamburger, 1963. "A Heuristic Program for Locating Warehouses," Management Science, INFORMS, vol. 9(4), pages 643-666, July.
    4. Eskigun, Erdem & Uzsoy, Reha & Preckel, Paul V. & Beaujon, George & Krishnan, Subramanian & Tew, Jeffrey D., 2005. "Outbound supply chain network design with mode selection, lead times and capacitated vehicle distribution centers," European Journal of Operational Research, Elsevier, vol. 165(1), pages 182-206, August.
    5. Zhou, Gengui & Min, Hokey & Gen, Mitsuo, 2003. "A genetic algorithm approach to the bi-criteria allocation of customers to warehouses," International Journal of Production Economics, Elsevier, vol. 86(1), pages 35-45, October.
    6. Stephen C. Graves & Sean P. Willems, 2005. "Optimizing the Supply Chain Configuration for New Products," Management Science, INFORMS, vol. 51(8), pages 1165-1180, August.
    7. Melo, M.T. & Nickel, S. & Saldanha-da-Gama, F., 2009. "Facility location and supply chain management - A review," European Journal of Operational Research, Elsevier, vol. 196(2), pages 401-412, July.
    8. Aikens, C. H., 1985. "Facility location models for distribution planning," European Journal of Operational Research, Elsevier, vol. 22(3), pages 263-279, December.
    9. Benjamin, Julian, 1990. "An analysis of mode choice for shippers in a constrained network with applications to just-in-time inventory," Transportation Research Part B: Methodological, Elsevier, vol. 24(3), pages 229-245, June.
    10. Thomas, Douglas J. & Griffin, Paul M., 1996. "Coordinated supply chain management," European Journal of Operational Research, Elsevier, vol. 94(1), pages 1-15, October.
    11. Current, John & Min, Hokey & Schilling, David, 1990. "Multiobjective analysis of facility location decisions," European Journal of Operational Research, Elsevier, vol. 49(3), pages 295-307, December.
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    Cited by:
    1. Farahani, Reza Zanjirani & Rezapour, Shabnam & Drezner, Tammy & Fallah, Samira, 2014. "Competitive supply chain network design: An overview of classifications, models, solution techniques and applications," Omega, Elsevier, vol. 45(C), pages 92-118.
    2. Olivares-Benitez, Elias & Ríos-Mercado, Roger Z. & González-Velarde, José Luis, 2013. "A metaheuristic algorithm to solve the selection of transportation channels in supply chain design," International Journal of Production Economics, Elsevier, vol. 145(1), pages 161-172.

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