L O C A T I O N-A L L O C A T I O N D E C I S I O N S I N A M U L T I-E C H E L O N S U P P L Y C H A I N N E T W O R K W I T H N E T P R E S E N T V A L U E
Author(s):
Abstract:
Supply chain management is a key issue and practical for sustainable economy, where its economic advantages can be shown in many papers. In order to remain competitive in the market, a supply chain must be efficient. One way to improve the efficiency is to maximize the total profit in the system. In this study, a mix-integer linear programming model is presented for location-allocation decisions in a four-echelon supply chain network. The first to the fourth echelon of the supply chain network includes suppliers, production plants, distribution centers, and customer zones, respectively. This paper amis to select the appropriate amount of loan and to adopt proper location-allocation decisions in all echelons of the chain in several periods, while maximizing the net present value. the net present value. Location-allocation decisions include locating a number of plants among a finite set of potential sites and decisions relate to the flow of goods from suppliers to production plants, from plants to distribution centers and from distribution centers to customer zones in each period. The suppliers prepare a similar raw material and the production plants produce a similar product from the raw material. The mix integer linear mathematical model of the location-allocation problem includes sale price, investment costs, raw material costs, production costs, setup costs, holding costs, shortage costs and transportation cost of goods. Setup costs of the factories involved in the network are obtained by an initial capital or funds borrowed from banks. Also, shortages are allowed and are considered to be lost sale. The proposed model maximizes the net present value of the profit after tax in different time periods using continuous compound interest rate. In order to demonstrate the applicability of the proposed formulation and to validate the results obtained, a numerical example is solved at the end using GAMS software. Finally, conclusion and future research recommendations come in the last section of paper.
Keywords:
Language:
Persian
Published:
Industrial Engineering & Management Sharif, Volume:31 Issue: 1, 2015
Pages:
107 to 112
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