IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i18p13949-d1243745.html
   My bibliography  Save this article

Impact of Fixed Cost Increase on the Optimization of Two-Stage Sustainable Supply Chain Networks

Author

Listed:
  • Ahmed Mostafa

    (Industrial Engineering Department, Faculty of Engineering, Zagazig University, Zagazig 44519, Egypt)

  • Kamal Moustafa

    (Industrial Engineering Department, Faculty of Engineering, Zagazig University, Zagazig 44519, Egypt)

  • Raafat Elshaer

    (Industrial Engineering Department, Collage of Engineering, King Khalid University, Abha 61421, Saudi Arabia)

Abstract

Supply chain networks have emerged as the backbone of economic activities in the modern world. Most of the literature on the optimization problem of transportation in supply chain networks (SCNs) considers fixed costs (FCs). Although most researchers have used fixed costs in supply chain design, none have studied their impact on optimal supply chain design. The design of the network can change when we take fixed costs into optimization. However, in the practical application of this problem, it is important to study the effect of FCs. This paper examines the impact of the fixed cost’s increase as well as the variable cost on the optimization of a two-stage SCN. To do so, two mathematical models for mixed-integer nonlinear programming were developed. The first model optimizes fixed and variable costs in addition to the opening cost, whereas the second model only optimizes variable and opening costs. To evaluate the effect of considering the FC on the optimization supply chain problem, four groups of instances were randomly generated and solved using Lingo. The results of the two models are compared using the average percentage deviation. In addition, sensitivity analysis was performed to determine the impact of changes in opening and variable costs on the considered optimization problem. The computational results and the sensitivity analysis show that the first model with minimized FC outperforms the second model, which does not consider the FC in minimization and FC affects the optimization.

Suggested Citation

  • Ahmed Mostafa & Kamal Moustafa & Raafat Elshaer, 2023. "Impact of Fixed Cost Increase on the Optimization of Two-Stage Sustainable Supply Chain Networks," Sustainability, MDPI, vol. 15(18), pages 1-15, September.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:18:p:13949-:d:1243745
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/18/13949/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/18/13949/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jawahar, N. & Balaji, A.N., 2009. "A genetic algorithm for the two-stage supply chain distribution problem associated with a fixed charge," European Journal of Operational Research, Elsevier, vol. 194(2), pages 496-537, April.
    2. Hong, Jiangtao & Diabat, Ali & Panicker, Vinay V. & Rajagopalan, Sridharan, 2018. "A two-stage supply chain problem with fixed costs: An ant colony optimization approach," International Journal of Production Economics, Elsevier, vol. 204(C), pages 214-226.
    3. Jian Wang & Xueyan Wang & Mingzhu Yu, 2020. "Multi-Period Multi-Product Supply Chain Network Design in the Competitive Environment," Mathematical Problems in Engineering, Hindawi, vol. 2020, pages 1-15, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ovidiu Cosma & Petrică C. Pop & Cosmin Sabo, 2020. "An Efficient Hybrid Genetic Approach for Solving the Two-Stage Supply Chain Network Design Problem with Fixed Costs," Mathematics, MDPI, vol. 8(5), pages 1-20, May.
    2. Zoubida Benmamoun & Khaoula Khlie & Mohammad Dehghani & Youness Gherabi, 2024. "WOA: Wombat Optimization Algorithm for Solving Supply Chain Optimization Problems," Mathematics, MDPI, vol. 12(7), pages 1-61, April.
    3. Diabat, Ali & Al-Salem, Mohammed, 2015. "An integrated supply chain problem with environmental considerations," International Journal of Production Economics, Elsevier, vol. 164(C), pages 330-338.
    4. Asrat Mekonnen Gobachew & Hans-Dietrich Haasis, 2023. "Scenario-Based Optimization of Supply Chain Performance under Demand Uncertainty," Sustainability, MDPI, vol. 15(13), pages 1-32, July.
    5. Ram Kumar P N, 2013. "On Modeling The Step Fixed-Charge Transportation Problem," Working papers 134, Indian Institute of Management Kozhikode.
    6. L. X. Cui, 2016. "Joint optimization of production planning and supplier selection incorporating customer flexibility: an improved genetic approach," Journal of Intelligent Manufacturing, Springer, vol. 27(5), pages 1017-1035, October.
    7. Hong, Jiangtao & Diabat, Ali & Panicker, Vinay V. & Rajagopalan, Sridharan, 2018. "A two-stage supply chain problem with fixed costs: An ant colony optimization approach," International Journal of Production Economics, Elsevier, vol. 204(C), pages 214-226.
    8. Adlakha, Veena & Kowalski, Krzysztof & Wang, Simi & Lev, Benjamin & Shen, Wenjing, 2014. "On approximation of the fixed charge transportation problem," Omega, Elsevier, vol. 43(C), pages 64-70.
    9. Jahani, Hamed & Abbasi, Babak & Sheu, Jiuh-Biing & Klibi, Walid, 2024. "Supply chain network design with financial considerations: A comprehensive review," European Journal of Operational Research, Elsevier, vol. 312(3), pages 799-839.
    10. Gbeminiyi John Oyewole & Olufemi Adetunji, 2021. "A Hybrid Algorithm To Solve The Fixed Charge Solid Location And Transportation Problem," Engineering Heritage Journal (GWK), Zibeline International Publishing, vol. 5(1), pages 1-11, March.
    11. Sasan Khalifehzadeh & Mehdi Seifbarghy & Bahman Naderi, 2017. "Solving a fuzzy multi objective model of a production–distribution system using meta-heuristic based approaches," Journal of Intelligent Manufacturing, Springer, vol. 28(1), pages 95-109, January.
    12. Bertazzi, Luca & Maggioni, Francesca, 2018. "A stochastic multi-stage fixed charge transportation problem: Worst-case analysis of the rolling horizon approach," European Journal of Operational Research, Elsevier, vol. 267(2), pages 555-569.
    13. J R Montoya-Torres & A Aponte & P Rosas, 2011. "Applying GRASP to solve the multi-item three-echelon uncapacitated facility location problem," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(2), pages 397-406, February.
    14. Muhammad Salman Shabbir & Ahmed Faisal Siddiqi & Lis M. Yapanto & Evgeny E. Tonkov & Andrey Leonidovich Poltarykhin & Anna Valeryevna Pilyugina & Aleksandr Mikhailovich Petrov & Amin Foroughi & Dinara, 2021. "Closed-Loop Supply Chain Design and Pricing in Competitive Conditions by Considering the Variable Value of Return Products Using the Whale Optimization Algorithm," Sustainability, MDPI, vol. 13(12), pages 1-17, June.
    15. José M. Ferrer & M. Teresa Ortuño & Gregorio Tirado, 2020. "A New Ant Colony-Based Methodology for Disaster Relief," Mathematics, MDPI, vol. 8(4), pages 1-23, April.
    16. Jianing Zhi & Burcu B. Keskin, 2018. "A Multi-Product Production/Distribution System Design Problem with Direct Shipments and Lateral Transshipments," Networks and Spatial Economics, Springer, vol. 18(4), pages 937-972, December.
    17. Sylvie Geisendorf, 2011. "Internal selection and market selection in economic Genetic Algorithms," Journal of Evolutionary Economics, Springer, vol. 21(5), pages 817-841, December.
    18. Abdul Salam Khan & Qazi Salman Khalid & Khawar Naeem & Rafiq Ahmad & Razaullah Khan & Waqas Saleem & Catalin Iulian Pruncu, 2021. "Application of Exact and Multi-Heuristic Approaches to a Sustainable Closed Loop Supply Chain Network Design," Sustainability, MDPI, vol. 13(5), pages 1-25, February.
    19. Shaoren Wang & Yenchun Jim Wu & Ruiting Li, 2022. "An Improved Genetic Algorithm for Location Allocation Problem with Grey Theory in Public Health Emergencies," IJERPH, MDPI, vol. 19(15), pages 1-18, August.
    20. A. N. Balaji & J. Mukund Nilakantan & Izabela Nielsen & N. Jawahar & S. G. Ponnambalam, 2019. "Solving fixed charge transportation problem with truck load constraint using metaheuristics," Annals of Operations Research, Springer, vol. 273(1), pages 207-236, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:18:p:13949-:d:1243745. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.