Design of a pharmaceutical supply chain network under uncertainty considering perishability and substitutability of products

We propose a new analytical model for pharmaceutical supply chain network design.Considering products perishability, substitutability and quantity discount.Introducing a novel robust possibilistic optimization approach.Providing a case study to show the application of the model in industry. This paper proposes a mathematical model for the network design of a pharmaceutical supply chain. The two objective functions of the presented model seek to minimize the total cost and the maximum unmet demand. We depart from the existing literature by considering products shelf-life, substitutability and quantity discount, while addressing uncertainties in costs and demand. In doing so, a novel robust possibilistic optimization approach is introduced and its performance is analyzed. Finally, a case study is provided and its proposed optimal network is discussed.

[1]  Prem Vrat,et al.  Research on management issues in the pharmaceutical industry: a literature review , 2012 .

[2]  Kiran Kumar Annamdas,et al.  Multi-objective optimization of engineering systems using game theory and particle swarm optimization , 2009 .

[3]  S. Chopra,et al.  Supply Chain Management: Strategy, Planning & Operation , 2007 .

[4]  Lazaros G. Papageorgiou,et al.  Global supply chain network optimisation for pharmaceuticals , 2005 .

[5]  Gilbert Laporte,et al.  Optimal joint replenishment, delivery and inventory management policies for perishable products , 2014, Comput. Oper. Res..

[6]  Simone Zanoni,et al.  Single-vendor single-buyer with integrated transport-inventory system: Models and heuristics in the case of perishable goods , 2007, Comput. Ind. Eng..

[7]  Helmut Schneider,et al.  Pharmaceutical supply chain specifics and inventory solutions for a hospital case , 2012 .

[8]  Z. Drezner,et al.  An EOQ Model with Substitutions Between Products , 1995 .

[9]  Amir H. Masoumi,et al.  A Supply Chain Generalized Network Oligopoly Model for Pharmaceuticals under Brand Differentiation and Perishability , 2012 .

[10]  Loay Alnaji,et al.  The role of Supply Chain Applications in Jordanian Pharmacies: A case study on Pharmacies in the capital city Amman , 2013 .

[11]  Desheng Dash Wu,et al.  Supply chain outsourcing risk using an integrated stochastic-fuzzy optimization approach , 2013, Inf. Sci..

[12]  Napsiah Ismail,et al.  Distribution Network Design for Fixed Lifetime Perishable Products: A Model and Solution Approach , 2013, J. Appl. Math..

[13]  Ching-Ter Chang,et al.  A modified goal programming model for piecewise linear functions , 2002, Eur. J. Oper. Res..

[14]  Mir Saman Pishvaee,et al.  Robust possibilistic programming for socially responsible supply chain network design: A new approach , 2012, Fuzzy Sets Syst..

[15]  George Mavrotas,et al.  Effective implementation of the epsilon-constraint method in Multi-Objective Mathematical Programming problems , 2009, Appl. Math. Comput..

[16]  N. Shah,et al.  Strategic Supply Chain Optimization for the Pharmaceutical Industries , 2001 .

[17]  Armand Baboli,et al.  Production , Manufacturing and Logistics A stochastic aggregate production planning model in a green supply chain : con ‐ sidering flexible lead times , nonlinear purchase and shortage cost functions , 2013 .

[18]  Ehsan Nikbakhsh,et al.  Robust closed-loop supply chain network design for perishable goods in agile manufacturing under uncertainty , 2012 .

[19]  Klaus Reinholdt Nyhuus Hansen,et al.  Planning operations before market launch for balancing time-to-market and risks in pharmaceutical supply chains , 2015 .

[20]  Christian L. Rossetti,et al.  Forces, trends, and decisions in pharmaceutical supply chain management , 2011 .

[21]  Bingjun Li,et al.  A location-inventory model for perishable agricultural product distribution centers , 2011, 2011 2nd International Conference on Artificial Intelligence, Management Science and Electronic Commerce (AIMSEC).

[22]  Seyed Taghi Akhavan Niaki,et al.  Bi-objective optimization of a multi-product multi-period three-echelon supply chain problem under uncertain environments: NSGA-II and NRGA , 2015, Inf. Sci..

[23]  Mehmet Soysal,et al.  Modelling food logistics networks with emission considerations: The case of an international beef supply chain , 2014 .

[24]  Iftekhar A. Karimi,et al.  Integrated supply chain planning for multinational pharmaceutical enterprises , 2011, Comput. Chem. Eng..

[25]  Reza Tavakkoli-Moghaddam,et al.  Multi-objective design of an organ transplant network under uncertainty , 2014 .

[26]  J.M. Laínez,et al.  Challenges and opportunities in enterprise-wide optimization in the pharmaceutical industry , 2012, Comput. Chem. Eng..

[27]  Nilay Shah,et al.  Pharmaceutical supply chains: key issues and strategies for optimisation , 2004, Comput. Chem. Eng..

[28]  S. Ali Torabi,et al.  A robust possibilistic programming approach for pharmaceutical supply chain network design , 2015, Comput. Chem. Eng..

[29]  Lazaros G. Papageorgiou,et al.  Supply chain optimisation for the process industries: Advances and opportunities , 2009, Comput. Chem. Eng..

[30]  Kannan Govindan,et al.  Two-echelon multiple-vehicle location-routing problem with time windows for optimization of sustainable supply chain network of perishable food , 2014 .

[31]  Xuan Yu,et al.  Pharmaceutical supply chain in China: current issues and implications for health system reform. , 2010, Health policy.

[32]  Masahiro Inuiguchi,et al.  Possibilistic linear programming: a brief review of fuzzy mathematical programming and a comparison with stochastic programming in portfolio selection problem , 2000, Fuzzy Sets Syst..

[33]  Zahra Firoozi,et al.  Effects of Integration on the Cost Reduction in Distribution Network Design for Perishable Products , 2014 .

[34]  Hojung Shin,et al.  A classification of the literature on the planning of substitutable products , 2015, Eur. J. Oper. Res..

[35]  Seyed Ali Torabi,et al.  Blood collection management: Methodology and application , 2015 .

[36]  Mei-Shiang Chang,et al.  Production scheduling and vehicle routing with time windows for perishable food products , 2009, Comput. Oper. Res..

[37]  Jiuping Xu,et al.  Approximation based fuzzy multi-objective models with expected objectives and chance constraints: Application to earth-rock work allocation , 2013, Inf. Sci..

[38]  Gang Yang,et al.  Plant co-ordination in pharmaceutics supply networks , 2003, OR Spectr..

[39]  Lazaros G. Papageorgiou,et al.  A hierarchical solution approach for multi-site capacity planning under uncertainty in the pharmaceutical industry , 2004, Comput. Chem. Eng..

[40]  Lazaros G. Papageorgiou,et al.  Global supply chain planning for pharmaceuticals , 2011 .

[41]  Han-Lin Li,et al.  A global optimization method for nonconvex separable programming problems , 1999, Eur. J. Oper. Res..

[42]  Hans-Otto Günther,et al.  Multi-objective integrated production and distribution planning of perishable products , 2012 .