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Simultaneous product family and supply chain design: An optimization approach

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  • Baud-Lavigne, Bertrand
  • Agard, Bruno
  • Penz, Bernard

Abstract

This paper deals with the difficult problem of joint product family and supply chain design. We present a general model that simultaneously considers the construction of the bill of materials and the design of the supply chain network. For the bill of materials, product, sub-assembly and component substitution possibilities are considered. For the supply chain network, facility and distribution center location are considered as well as the choice of suppliers. A Mixed Integer Linear Program (MILP) model is proposed. The MILP formulation is solved optimally for medium-sized instances. For larger instances, two heuristics derived from the MILP are designed. These methods are computationally tested on various instances from a generator conceived for this purpose. The modelling of product substitution possibilities through product transformation permits the solving of large size instances that are now adequate for real problems.

Suggested Citation

  • Baud-Lavigne, Bertrand & Agard, Bruno & Penz, Bernard, 2016. "Simultaneous product family and supply chain design: An optimization approach," International Journal of Production Economics, Elsevier, vol. 174(C), pages 111-118.
    • Handle: RePEc:eee:proeco:v:174:y:2016:i:c:p:111-118
    DOI: 10.1016/j.ijpe.2016.01.015
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    References listed on IDEAS

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    1. Lamothe, Jacques & Hadj-Hamou, Khaled & Aldanondo, Michel, 2006. "An optimization model for selecting a product family and designing its supply chain," European Journal of Operational Research, Elsevier, vol. 169(3), pages 1030-1047, March.
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    5. Agard, Bruno & Penz, Bernard, 2009. "A simulated annealing method based on a clustering approach to determine bills of materials for a large product family," International Journal of Production Economics, Elsevier, vol. 117(2), pages 389-401, February.
    6. Nepal, Bimal & Monplaisir, Leslie & Famuyiwa, Oluwafemi, 2012. "Matching product architecture with supply chain design," European Journal of Operational Research, Elsevier, vol. 216(2), pages 312-325.
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    8. Chen, Hung-Yi, 2010. "The impact of item substitutions on production-distribution networks for supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(6), pages 803-819, November.
    9. Baud-Lavigne, Bertrand & Agard, Bruno & Penz, Bernard, 2012. "Mutual impacts of product standardization and supply chain design," International Journal of Production Economics, Elsevier, vol. 135(1), pages 50-60.
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    Cited by:

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    3. Cortinhal, M. J. & Lopes, M. J. & Melo, M. T., 2018. "Impact of partial product outsourcing, transportation mode selection, and single-assignment requirements on the design of a multi-stage supply chain network," Technical Reports on Logistics of the Saarland Business School 15, Saarland University of Applied Sciences (htw saar), Saarland Business School.

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