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Supply Chain Network Design Problem for a New Market Opportunity in an Agile Manufacturing System


  • Reza Babazdeh
  • Jafar Razmi
  • Reza Ghodsi

    () ("Dimitrie Cantemir" Christian University)


The characteristics of today's competitive environment, such as the speed with which products are designed, manufactured, and distributed, and the need for higher responsiveness and lower operational cost, are forcing companies to search for innovative ways to do business. The concept of agile manufacturing has been proposed in response to these challenges for companies. This paper copes with the strategic and tactical level decisions in agile supply chain network design. An efficient mixed integer linear programming (MILP) model is developed that is able to consider the key characteristics of agile supply chain such as direct shipments, outsourcing, different transportation modes, discount, alliance (process and information integration) between opened facilities and maximum waiting time of customers for deliveries. In addition, in the proposed model the capacity of facilities is determined as decision variables which are often assumed to be fixed. Computational results illustrate that the proposed model can be applied as a power tool in agile supply chain network design as well as integration of strategic decisions with tactical decisions.

Suggested Citation

  • Reza Babazdeh & Jafar Razmi & Reza Ghodsi, 2012. "Supply Chain Network Design Problem for a New Market Opportunity in an Agile Manufacturing System," Knowledge Horizons - Economics, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 4(1-2), pages 53-62, March-Jun.
  • Handle: RePEc:khe:journl:v:4:y:2012:i:1:2:p:53-62

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    References listed on IDEAS

    1. P. Korhonen, 1998. "Multiple Objective Programming Support," Working Papers ir98010, International Institute for Applied Systems Analysis.
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    Cited by:

    1. 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.

    More about this item


    Supply chain management; Agile supply chain network design; Outsourcing; Responsiveness;

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing


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