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Strategic design of competing supply chain networks for inelastic demand

Author

Listed:
  • S Rezapour

    (Amirkabir University of Technology, Tehran, Iran)

  • R Zanjirani Farahani

    (Amirkabir University of Technology, Tehran, Iran)

  • T Drezner

    (California State University-Fullerton, Fullerton, USA)

Abstract

A model for designing the network of a new entrant supply chain under inelastic demand and in the presence of pre-existing competing chains is proposed. These supply chains provide an identical product for a market area. The model considers the location of distribution centres and retail outlets on a discrete set of potential locations. The assumptions of the model are: (1) static competition between the new and pre-existing chains and (2) a probabilistic customer behaviour based on an attraction function depending on both the location and the quality of the retailers. This model also incorporates the impact of the facilities’ location decisions on the operational inventory and shipment decisions. The resulting model is formulated as a mixed integer non-linear programme (MINLP). To solve the MINLP it is transformed to a linear one. We illustrate the model, discuss the results of a real-world case, and investigate the effectiveness of the proposed algorithm using randomly generated examples.

Suggested Citation

  • S Rezapour & R Zanjirani Farahani & T Drezner, 2011. "Strategic design of competing supply chain networks for inelastic demand," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(10), pages 1784-1795, October.
    • Handle: RePEc:pal:jorsoc:v:62:y:2011:i:10:p:1784-1795
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    Citations

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    Cited by:

    1. Thomas Hacardiaux & Jean-Sébastien Tancrez, 2020. "Assessing the environmental benefits of horizontal cooperation using a location-inventory model," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 28(4), pages 1363-1387, December.
    2. Wallbach, Sören, 2020. "Assimilation and Diffusion of Multi-Sided Platforms in Dynamic B2B Networks: Inhibiting Factors and Their Consequences," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 123277, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    3. Rezapour, Shabnam & Farahani, Reza Zanjirani & Dullaert, Wout & De Borger, Bruno, 2014. "Designing a new supply chain for competition against an existing supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 67(C), pages 124-140.
    4. Rezapour, Shabnam & Baghaian, Atefe & Naderi, Nazanin & Sarmiento, Juan P., 2023. "Infection transmission and prevention in metropolises with heterogeneous and dynamic populations," European Journal of Operational Research, Elsevier, vol. 304(1), pages 113-138.
    5. Fakheri, Sajjad & Bahrami-Bidoni, Zeynab & Makui, Ahmad & Pishvaee, Mir Saman & Santibanez Gonzalez, Ernesto DR., 2022. "A sustainable competitive supply chain network design for a green product under uncertainty: A case study of Iranian leather industry," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    6. Isa Feyzian-Tary & Jafar Razmi & Mohamad Sadegh Sangari, 2018. "A variational inequality formulation for designing a multi-echelon, multi-product supply chain network in a competitive environment," Annals of Operations Research, Springer, vol. 264(1), pages 89-121, May.
    7. Yuxiang Yang & Zuqing Huang & Qiang Patrick Qiang & Gengui Zhou, 2017. "A Mathematical Programming Model with Equilibrium Constraints for Competitive Closed-Loop Supply Chain Network Design," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 34(05), pages 1-31, October.
    8. Sören Wallbach & Katrin Coleman & Ralf Elbert & Alexander Benlian, 2019. "Multi-sided platform diffusion in competitive B2B networks: inhibiting factors and their impact on network effects," Electronic Markets, Springer;IIM University of St. Gallen, vol. 29(4), pages 693-710, December.
    9. Ata Allah Taleizadeh & Ali Ghavamifar & Amir Khosrojerdi, 2022. "Resilient network design of two supply chains under price competition: game theoretic and decomposition algorithm approach," Operational Research, Springer, vol. 22(1), pages 825-857, March.
    10. 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.
    11. Chen, Zhisong & Su, Shong-Iee Ivan, 2020. "International competition and trade conflict in a dual photovoltaic supply chain system," Renewable Energy, Elsevier, vol. 151(C), pages 816-828.
    12. Shamekhi Amiri, A. & Torabi, S. Ali & Ghodsi, R., 2018. "An iterative approach for a bi-level competitive supply chain network design problem under foresight competition and variable coverage," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 109(C), pages 99-114.
    13. Ghavamifar, Ali & Makui, Ahmad & Taleizadeh, Ata Allah, 2018. "Designing a resilient competitive supply chain network under disruption risks: A real-world application," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 115(C), pages 87-109.
    14. Kieran P. Donaghy, 2012. "The Co-evolution of Logistics, Globalization and Spatial Price Competition: Implications for a Unified Theory of Trade and Location," Chapters, in: Roberta Capello & Tomaz Ponce Dentinho (ed.), Globalization Trends and Regional Development, chapter 3, Edward Elgar Publishing.

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