Title: Increased flexibility in multi echelon multi capacitated supply chain network design

Authors: Sahand Ashtab; Richard J. Caron; Esaignani Selvarajah

Addresses: Shannon School of Business, Cape Breton University, Sydney, NS, B1P 6L2, Canada ' Department of Mathematics and Statistics, University of Windsor, Windsor, ON N9B 3P4, Canada ' Odette School of Business, University of Windsor, Windsor, ON N9B 3P4, Canada

Abstract: The multi echelon, multi capacitated supply chain network design challenge is to determine the numbers, locations and capacity levels of plants and warehouses; as well as the product flow from plants to warehouses and then from warehouses to customer zones in order to meet demand at minimum cost. Mathematical models for multi capacitated supply chain network design provide a finite set of capacity levels from which to choose; and include variables and constraints to ensure the selection of a single capacity level for each facility to be built. By eliminating the constraints that enforce a single capacity selection, we allow for the selection of several capacity levels for a single plant or warehouse. If such a selection occurs, the plant or warehouse is built with size equal to the sum of the selected capacity levels. This gives an exponential increase in the number of available capacity levels. The increased flexibility allows for less costly supply chain network designs. We present numerical results that demonstrate improved solutions, that is, lower cost supply chain network designs, with lower computational effort.

Keywords: facility planning and design; supply chain network design; facility location; mixed integer linear program; multi echelon; multi capacitated.

DOI: 10.1504/IJOR.2019.103125

International Journal of Operational Research, 2019 Vol.36 No.3, pp.399 - 412

Received: 17 Dec 2015
Accepted: 26 Nov 2016

Published online: 17 Oct 2019 *

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