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A tabu search heuristic for redesigning a multi-echelon supply chain network over a planning horizon

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  • Melo, M.T.
  • Nickel, S.
  • Saldanha-da-Gama, F.

Abstract

This paper addresses the problem of redesigning a supply chain network with multiple echelons and commodities. The problem belongs to a comprehensive class of network redesign problems previously introduced in the literature. Redesign decisions comprise the relocation of existing facilities to new sites under an available budget over a finite time horizon, the supply of commodities by upstream facilities, the inventory levels at storage facilities, and the flow of commodities through the network. The problem is modeled as a large-scale mixed-integer linear program. Feasible solutions are obtained by using a tabu search procedure that explores the space of the facility location variables. The latter prescribe the time periods in which changes in the network configuration occur. They are triggered by the setup of new facilities, which operate with capacity transferred from the existing facilities, and by closing the latter upon their entire relocation. As the problem is highly constrained, infeasible solutions with excess budget are allowed during the course of the search process. However, such solutions are penalized for their infeasibility. Computational experiments on realistically sized randomly generated instances indicate that this strategic oscillation scheme used in conjunction with tabu search performs very well.

Suggested Citation

  • Melo, M.T. & Nickel, S. & Saldanha-da-Gama, F., 2012. "A tabu search heuristic for redesigning a multi-echelon supply chain network over a planning horizon," International Journal of Production Economics, Elsevier, vol. 136(1), pages 218-230.
  • Handle: RePEc:eee:proeco:v:136:y:2012:i:1:p:218-230
    DOI: 10.1016/j.ijpe.2011.11.022
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    References listed on IDEAS

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    Cited by:

    1. repec:pal:jorsoc:v:68:y:2017:i:7:d:10.1057_jors.2016.42 is not listed on IDEAS
    2. repec:spr:annopr:v:242:y:2016:i:2:d:10.1007_s10479-015-1924-3 is not listed on IDEAS
    3. Longinidis, Pantelis & Georgiadis, Michael C., 2014. "Integration of sale and leaseback in the optimal design of supply chain networks," Omega, Elsevier, vol. 47(C), pages 73-89.
    4. Martins, C. L. & Melo, Teresa & Pato, Margarida Vaz, 2016. "Redesigning a food bank supply chain network, Part I: Background and mathematical formulation," Technical Reports on Logistics of the Saarland Business School 10, Saarland University of Applied Sciences (htw saar), Saarland Business School.
    5. Alumura, Sibel A. & Karab, Bahar Y. & Melo, M. Teresa, 2013. "Location and logistics," Technical Reports on Logistics of the Saarland Business School 5, Saarland University of Applied Sciences (htw saar), Saarland Business School.
    6. Fattahi, Mohammad & Mahootchi, Masoud & Govindan, Kannan & Moattar Husseini, Seyed Mohammad, 2015. "Dynamic supply chain network design with capacity planning and multi-period pricing," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 81(C), pages 169-202.
    7. Cortinhal, M. J. & Lopes, M. J. & Melo, M. T., 2014. "Redesigning a three-echelon logistics network over multiple time periods with transportation mode selection and outsourcing opportunities," Technical Reports on Logistics of the Saarland Business School 7, Saarland University of Applied Sciences (htw saar), Saarland Business School.
    8. Hammami, R. & Frein, Y., 2014. "Redesign of global supply chains with integration of transfer pricing: Mathematical modeling and managerial insights," International Journal of Production Economics, Elsevier, vol. 158(C), pages 267-277.

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