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Plant location and procurement planning in knockdown production systems

Author

Listed:
  • S-K Lim

    (PricewaterhouseCoopers)

  • Y-D Kim

    (Korea Advanced Institute of Science and Technology)

Abstract

We consider an integrated problem of plant location and capacity planning for components procurement in knockdown production systems. The problem is that of determining the schedule of opening components manufacturing plants, plans for acquisition of capacities in opened components manufacturing plants, and plans for components procurement in final assembly plants with the objective of minimizing the sum of fixed costs for opening plants, acquisition and operation costs of facilities, and delivery and subcontracting costs of components. The problem is formulated as a mixed integer linear program and solved by a two-stage solution procedure. In the solution procedure, the problem is decomposed into two tractable subproblems and these subproblems are solved sequentially. In the first stage, a dynamic plant location problem is solved using a cut and branch algorithm based on Gomory cuts, while a multiperiod capacity planning problem is solved in the second stage by a heuristic algorithm that uses a cut and branch algorithm and a variable reduction scheme. The solution procedure is tested on problems of a practical size and results show that the procedure gives reasonably good solutions.

Suggested Citation

  • S-K Lim & Y-D Kim, 2001. "Plant location and procurement planning in knockdown production systems," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 52(3), pages 271-282, March.
    • Handle: RePEc:pal:jorsoc:v:52:y:2001:i:3:d:10.1057_palgrave.jors.2601095
    DOI: 10.1057/palgrave.jors.2601095
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    Cited by:

    1. Aghezzaf, El-Houssaine, 2007. "Production planning and warehouse management in supply networks with inter-facility mold transfers," European Journal of Operational Research, Elsevier, vol. 182(3), pages 1122-1139, November.
    2. Kim, Dong-Guen & Kim, Yeong-Dae, 2010. "A branch and bound algorithm for determining locations of long-term care facilities," European Journal of Operational Research, Elsevier, vol. 206(1), pages 168-177, October.
    3. E Aghezzaf, 2005. "Capacity planning and warehouse location in supply chains with uncertain demands," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(4), pages 453-462, April.

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