Title: A medical device distribution network design strategic planning process and optimisation model

Authors: Renato de Matta; Tan Miller; Emmanuel Peters

Addresses: Business Analytics and Information Systems Department, Tippie School of Business, University of Iowa, Iowa City, Iowa, 52241, USA ' Information Systems, Analytics and Supply Chain Department, Norm Brodsky School of Business, Rider University, Lawrenceville, NJ, 08648, USA ' Rutgers University–Camden, School of Business, 227 Penn Street, Camden, NJ, 08102, USA

Abstract: In this research study, we propose a strategic network design planning approach for the medical device industry that utilises a profit maximising optimisation model, innovative data pre-processing methods, and product pricing sensitivity analyses. This process provides decision support for planning the design of flexible, responsive physical networks, and for improving inventory deployment practices. This strategic planning approach poses a series of distribution strategy scenarios, each evaluated by our mathematical optimisation model. The modeling methodology includes data pre-processing steps that facilitate the incorporation of critical customer service order cycle delivery requirements and transportation mode choice selections, as well as product returns and product refurbishment processes specific to the medical device industry. We also demonstrate how the incorporation of product pricing sensitivity analysis into our planning process facilitates the coordination of distribution network design strategy with sales and marketing strategic pricing decisions. We present a case study with numerical results.

Keywords: manufacturing and distribution planning; strategic network planning; medical device network design; medical device industry; optimisation modelling; data pre-processing procedures for optimisation.

DOI: 10.1504/IJDATS.2024.137858

International Journal of Data Analysis Techniques and Strategies, 2024 Vol.16 No.2, pp.126 - 161

Received: 12 Nov 2022
Accepted: 26 Dec 2023
Published online: 05 Apr 2024 *

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