Title: Material flow optimisation in a multi-echelon and multi-product supply chain

Authors: Raju Rajkanth; G. Srinivasan; Mohan Gopalakrishnan

Addresses: Department of Management Studies, Indian Institute of Technology Madras, Chennai, Tamilnadu 600036, India ' Department of Management Studies, Indian Institute of Technology Madras, Chennai, Tamilnadu 600036, India ' Supply Chain Management, W.P. CAREY School of Business, Arizona State University, Arizona, USA

Abstract: This paper addresses a distribution problem in a multi-product, multi-echelon supply chain. We develop a mixed integer linear programming formulation that considers allocation of vehicles with varying capacities for the transportation of products between the stages of the supply chain. The cost of transportation includes the fixed and variable costs of using the vehicles. The proposed formulations are solved optimally up to certain sizes, and we propose a heuristic based on total opportunity penalty cost method to solve the large sized problems. These proposed solution procedure is tested over a set of hypothetical problem sets. The results indicate that the proposed heuristic algorithm yields solutions within 5% from the optimal solutions.

Keywords: branch-and-bound algorithm; heuristics; mixed integer linear programming; MILP; supply chain management; SCM; transport problems; material flow optimisation; multi-echelon supply chains; multi-product supply chains; vehicle allocation.

DOI: 10.1504/IJLSM.2017.080633

International Journal of Logistics Systems and Management, 2017 Vol.26 No.1, pp.105 - 124

Received: 22 Jul 2015
Accepted: 14 Nov 2015
Published online: 01 Dec 2016 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article