Title: Optimisation of logistics network of a multinational firm under uncertainty

Authors: Zhili Tian

Addresses: Decision Sciences and Information Systems, College of Business Administration, Florida International University, Miami, FL 33199, USA

Abstract: The problem of optimally determining the locations of plants and distribution centres for multinational firms is considered. This problem is formulated as a mixed-integer non-linear program which maximises the expected after-tax profit. Uncertainties of exchange rates and demand are considered in determining the facility locations. Heuristics to solve the problem are developed and bounds to evaluate the quality of the heuristics are derived. These methods are tested with data from a leading multinational manufacturer. The results show that the developed techniques have significant potential to maximise the profits of a multinational firm.

Keywords: revenue management; risk management; hedging; forecasting; supply chain management; SCM; corporate taxation; optimisation; logistics network; multinationals; demand uncertainty; multinational corporations; MNCs; plant location; distribution centres; mixed integer nonlinear programming; MINLP; after-tax profit; exchange rates; manufacturing industry.

DOI: 10.1504/IJRM.2016.079819

International Journal of Revenue Management, 2016 Vol.9 No.4, pp.252 - 272

Received: 13 Apr 2016
Accepted: 08 May 2016
Published online: 16 Oct 2016 *

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