Integrated strategic and tactical supply chain planning with price-sensitive demands

Abstract

This paper deals with the supply chain network design and planning for a multicommodity and multi-layer network over a planning horizon with multiple periods in which demands of customer zones are considered to be price dependent. These prices determine the demands using plausible price-demand relationships of customer zones. The net income of the supply chain is maximized, while satisfying budget constraints for investment in network design. In addition, a new approach is considered for capacity planning to make the problem more realistic. In this regard, when production plants are opened and expanded, capacity options are taken into account for manufacturing operations. Furthermore, several aspects relevant to real world applications are captured in the problem. Different interconnected time periods in the planning horizon are considered for strategic and tactical decisions in the problem and then, a mixed-integer linear programming (MILP) model is developed. The performance and applications of the model are investigated by several test problems with reasonable sizes. The numerical results illustrate that obtained solutions after solving the MILP model by using CPLEX solver are acceptable. Moreover, using an alternative pricing approach, a tight upper bound is provided for the problem. In addition, a deep sensitivity analysis is conducted to show the validity and performance of the proposed model.

Accelerated Benders’ Decomposition for Integrated Forward/Reverse Logistics Network Design under Uncertainty

“…Constraints (4)-(6) deal with the hybrid strategy of locating manufacturing and remanufacturing plants. Constraint (13) guarantees that the capacity of each distribution center is greater than the base stock level amount. Relation (14) assures that the amount of raw material provided to every manufacturer in each period by wholesale contract is equal to the wholesale contract amount.…”

Evolutionary algorithms for supply chain management

“…The mentioned approach can be further used in evolutionary algorithms as a very powerful technique in such problems. Fattahi et al (2016) present a mixed-integer linear programming (MILP) model to address the supply chain network design and planning for a multi commodity and multilayer network over a planning horizon with multiple periods in which demands of customer zones are considered to be price dependent. The authors employ several test problems to investigate the performance and applications of the model.…”

Dynamic supply chain network design with capacity planning and multi-period pricing

“…Recently, Fattahi et al (2015) have also done a research study in this area without proposing a solution approach. Furthermore, many exact solution methods (see Aghezzaf, 2005;Canel et al, 2001) have been proposed to solve the problems with simple supply chain networks.…”

“…In many studies on tactical supply chain planning, price and inventory decisions are integrated to influence market demand (Fattahi et al, 2015). Production and distribution planning can also be combined with price decisions (e.g.…”