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

This paper addresses a new problem in designing and planning a multi-echelon and multi-product supply chain network over a multi-period horizon in which customer zones have price-sensitive demands. Based on price-demand relationships, a generic method is presented to obtain price levels for products and then, a mixed-integer linear programming model is developed. Due to the problem intractability, a simulated annealing algorithm that uses some developed linear relaxation-based heuristics for capacity planning and pricing is presented. Numerical results demonstrate the significance of the model as well as the efficiency of the solution algorithm and linear relaxation-based heuristics.

[1]  Hokey Min,et al.  The dynamic relocation and phase-out of a hybrid, two-echelon plant/warehousing facility: A multiple objective approach , 2000, Eur. J. Oper. Res..

[2]  K. Talluri,et al.  The Theory and Practice of Revenue Management , 2004 .

[3]  Geraldo Robson Mateus,et al.  Stochastic capacity planning and dynamic network design , 2013 .

[4]  Justo Puerto,et al.  Dynamic supply chain design with inventory , 2008, Comput. Oper. Res..

[5]  Cem Canel,et al.  An algorithm for the capacitated, multi-commodity multi-period facility location problem , 2001, Comput. Oper. Res..

[6]  Anna Nagurney,et al.  Supply chain network design under profit maximization and oligopolistic competition , 2010 .

[7]  Amir Ahmadi-Javid,et al.  An efficient optimization procedure for designing a capacitated distribution network with price-sensitive demand , 2014 .

[8]  Scott Kirkpatrick,et al.  Optimization by simulated annealing: Quantitative studies , 1984 .

[9]  Stefan Nickel,et al.  A multi-stage stochastic supply network design problem with financial decisions and risk management , 2012 .

[10]  Pierre Hansen,et al.  Facility location under zone pricing , 1997 .

[11]  A. Nagurney,et al.  A supply chain network equilibrium model , 2002 .

[12]  Oded Berman,et al.  Competitive facility location and design problem , 2007, Eur. J. Oper. Res..

[13]  Nathalie Bostel,et al.  A dynamic model for facility location in the design of complex supply chains , 2008 .

[14]  Xue Han,et al.  Computational comparison of two formulations for dynamic supply chain reconfiguration with capacity expansion and contraction , 2013, Comput. Oper. Res..

[15]  M. Georgiadis,et al.  Integration of financial statement analysis in the optimal design of supply chain networks under demand uncertainty , 2011 .

[16]  João C. N. Clímaco,et al.  Efficient primal-dual heuristic for a dynamic location problem , 2007, Comput. Oper. Res..

[17]  Justo Puerto,et al.  A multiperiod two-echelon multicommodity capacitated plant location problem , 2000, Eur. J. Oper. Res..

[18]  Anna Nagurney,et al.  Optimal Supply Chain Network Design and Redesign at Minimal Total Cost and with Demand Satisfaction , 2010 .

[19]  I ScottKirkpatrick.  Optimization by Simulated Annealing: Quantitative Studies , 1984 .

[20]  Mohammad Fattahi,et al.  Integrated strategic and tactical supply chain planning with price-sensitive demands , 2016, Ann. Oper. Res..

[21]  Shad Dowlatshahi,et al.  A Multiobjective Distribution-Pricing Model for Multiperiod Price-Sensitive Demands , 2013, IEEE Transactions on Engineering Management.

[22]  R. Phillips,et al.  Pricing and Revenue Optimization , 2005 .

[23]  Anna Nagurney,et al.  Multiperiod competitive supply chain networks with inventorying and a transportation network equilibrium reformulation , 2012 .

[24]  Robert Beauregard,et al.  Designing logistics networks in divergent process industries: A methodology and its application to the lumber industry , 2006 .

[25]  Andreas Drexl,et al.  Facility location models for distribution system design , 2005, Eur. J. Oper. Res..

[26]  Younes Hamdouch.  Multi-period supply chain network equilibrium with capacity constraints and purchasing strategies , 2011 .

[27]  Francisco Saldanha-da-Gama,et al.  Comparing classical performance measures for a multi-period, two-echelon supply chain network design problem with sizing decisions , 2013, Comput. Ind. Eng..

[28]  Ronald H. Ballou,et al.  Dynamic Warehouse Location Analysis , 1968 .

[29]  Ying Zhang,et al.  Hybrid metaheuristic solutions to inventory location routing problem , 2014 .

[30]  Shuzhong Zhang,et al.  On a Profit Maximizing Location Model , 2001, Ann. Oper. Res..

[31]  Michael C. Georgiadis,et al.  Optimal design of supply chain networks under uncertain transient demand variations , 2011 .

[32]  Laureano F. Escudero,et al.  Fix-and-Relax-Coordination for a multi-period location-allocation problem under uncertainty , 2013, Comput. Oper. Res..

[33]  Francisco Saldanha-da-Gama,et al.  Dynamic multi-commodity capacitated facility location: a mathematical modeling framework for strategic supply chain planning , 2006, Comput. Oper. Res..

[34]  Genichii Taguchi,et al.  Introduction to quality engineering. designing quality into products a , 1986 .

[35]  Jacques-François Thisse,et al.  Uncapacitated plant location under alternative spatial price policies , 1990 .

[36]  Mahdi Bashiri,et al.  Integrated strategic and tactical planning in a supply chain network design with a heuristic solution method , 2013, Comput. Oper. Res..

[37]  Kannan Govindan,et al.  The optimal replenishment policy for time-varying stochastic demand under vendor managed inventory , 2015, Eur. J. Oper. Res..

[38]  J. L. Wagner,et al.  The Optimal Nodal Location of Public Facilities With Price‐Sensitive Demand , 2010 .

[39]  Amir Ahmadi-Javid,et al.  Incorporating location, inventory and price decisions into a supply chain distribution network design problem , 2015, Comput. Oper. Res..

[40]  M. T. Melo,et al.  An efficient heuristic approach for a multi-period logistics network redesign problem , 2014 .

[41]  Mahdi Bashiri,et al.  A NEW APPROACH TO TACTICAL AND STRATEGIC PLANNING IN PRODUCTION– DISTRIBUTION NETWORKS , 2012 .

[42]  E. Aghezzaf,et al.  Capacity planning and warehouse location in supply chains with uncertain demands , 2005, J. Oper. Res. Soc..

[43]  Mohammad Hossein Fazel Zarandi,et al.  Two-machine robotic cell scheduling problem with sequence-dependent setup times , 2013, Comput. Oper. Res..

[44]  Giovanni Righini,et al.  A heuristic approach for the green vehicle routing problem with multiple technologies and partial recharges , 2014 .

[45]  T. Drezner,et al.  Competitive supply chain network design: An overview of classifications, models, solution techniques and applications , 2014 .

[46]  Nathalie Bostel,et al.  A linear relaxation-based heuristic approach for logistics network design , 2010, Comput. Ind. Eng..

[47]  Zuo-Jun Max Shen,et al.  A profit-maximizing supply chain network design model with demand choice flexibility , 2006, Oper. Res. Lett..

[48]  Mohammad Fattahi,et al.  A new approach for maintenance scheduling of generating units in electrical power systems based on their operational hours , 2014, Comput. Oper. Res..

[49]  Frank Plastria,et al.  Maximal covering location problem with price decision for revenue maximization in a competitive environment , 2009, OR Spectr..

[50]  Francisco Saldanha-da-Gama,et al.  Facility location and supply chain management - A review , 2009, Eur. J. Oper. Res..

[51]  Ram Ramesh,et al.  A multi-period profit maximizing model for retail supply chain management: An integration of demand and supply-side mechanisms , 2000, Eur. J. Oper. Res..

[52]  Frank Plastria,et al.  Discrete models for competitive location with foresight , 2008, Comput. Oper. Res..

[53]  Allen J. Scott,et al.  Dynamic Location-Allocation Systems: Some Basic Planning Strategies , 1971 .

[54]  Reza Tavakkoli-Moghaddam,et al.  A dynamic pricing approach for returned products in integrated forward/reverse logistics network design , 2013 .

[55]  Stefan Nickel,et al.  A tabu search heuristic for redesigning a multi-echelon supply chain network over a planning horizon , 2012 .

[56]  Augusto Q. Novais,et al.  Simultaneous design and planning of supply chains with reverse flows: A generic modelling framework , 2010, Eur. J. Oper. Res..