Determination of Material Flows in a Multi-echelon Assembly SupplyChain

Subject Areas : Design of Experiment

Mehrnoosh Taherkhani ¹ , Mehdi Seifbarghy ²

1 - MSc, Faculty of Industrial and Mechanical Engineering, Qazvin Branch, Islamic Azad University, Qazvin, Iran
2 - bAssistant Professor, Faculty of Industrial and Mechanical Engineering, Qazvin Branch, Islamic Azad University, Qazvin, Iran

Received: 2011-08-20 Accepted : 2012-01-15 Published : 2012-09-30

Keywords: simulated annealing, Supply Chain, Multi-echelon, Cost minimization,

Abstract :

This study aims to minimize the total cost of a four-echelon supply chain including suppliers, an assembler, distributers, and retailers. Thetotal cost consists of purchasing raw materials from the suppliers by the assembler, assembling the final product, materials transportationfrom the suppliers to the assembler, product transportation from the assembler to the distributors, product transportation from thedistributors to the retailers, and product holding and stock-out in the distribution centers. To this end, having modeled the problemaddressed, a numerical example including ten suppliers, an assembler, three distributors and eight retailers in the chain is solved for fourperiods of time. Then the model is solved by a simulated annealing-based heuristic and LINGO. Finally, a set of 30 numerical problems ofsmall and large sizes are developed and solved. The results indicate that simulated annealing-based heuristic provides near optimalsolutions.