Optimization of a supply chain network using the simulation technique and Harmony Search algorithm

In nowadays market, the increased level of competitiveness and uneven fall of the product/service demands are pushing enterprises to make key efforts for optimization of their process management. It involves collaboration in multiple dimensions including information sharing, capacity planning, and reliability among players. One of the most important dimensions of the supply chain network is to determine its optimal operating conditions incurring minimum total costs. However, this is even a tough job due to the complexities inherit the dynamic interaction among multiple facilities and locations. In order to resolve these complexities and to identify the optimal operating conditions, we have proposed a hybrid approach via integrating the simulation technique, Taguchi method, robust multiple non-linear regression analysis and the Harmony Search algorithm, which is the main contribution of the research. In the first experiment, design concepts are used to define a number of scenarios for the supply chain. Then each of these scenarios is implemented in a simulated environment. The results of the simulation used to estimate the relationship between the chain and chain cost factors. This relationship can be used to optimize the supply chain which minimizes the system costs. This research provides a framework to understand the intricacies of the dynamics and interdependency among the various factors involved in the supply chain. It provides guidelines to the manufacturers for the selection of appropriate plant capacity and proposes a justified strategy for delayed differentiation.