An optimization approach for a joint location inventory model considering quantity discount policy

Joint location inventory problems involve determination of two key decisions in a supply chain network: inventory control decisions and facility location decisions. This paper addresses a supply chain network consisting of a supplier and a set of retailers, in which a number of distribution centers (DCs) are to be located. The objectives of a joint location inventory problem are to identify the optimal number and location of the DCs, the assignment of the retailers to the DCs and determining the inventory control decision of the DCs so that the total cost is minimized. This paper extends the traditional joint location inventory model that considers the basic EOQ policy to replenish the inventory of retailers, by considering quantity discount as the inventory policy of the supply chain network. The new model can be applied to both EOQ and quantity discount policies. An efficient two-stage heuristic algorithm is developed to solve the model. Numerical experiments show the efficiency of the proposed algorithm

Facility layout design for hybrid cellular manufacturing systems

Facility layout which is the arrangement of facilities in the shop-floor has a great impact on the performance of manufacturing systems. An effective layout decreases material handling cost, throughput time, lead-time and results in increasing productivity and efficiency of manufacturing systems. Although layout problems have significant roles on the efficacy of manufacturing systems, scant attention has been paid to the layout design in hybrid cellular manufacturing systems. In this paper, a mathematical model for layout problems in a hybrid cellular manufacturing system is proposed that minimizes the total material handling cost (both inter-cell and intra-cell material handling cost). To solve the model, a variant of a simulated annealing algorithm is developed. The results show that the developed algorithm outperforms the algorithm that was benchmarked from the literature in terms of solution quality and computation time

A genetic algorithm for solving supply chain network design model

Network design is by nature costly and optimization models play significant role in reducing the unnecessary cost components of a distribution network. This study proposes a genetic algorithm to solve a distribution network design model. The structure of the chromosome in the proposed algorithm is defined in a novel way that in addition to producing feasible solutions, it also reduces the computational complexity of the algorithm. Computational results are presented to show the algorithm performance

Design of a facility layout model in hybrid cellular manufacturing systems under variable demand

Changes in demand, as one of the issues of volatile manufacturing systems, decline the performance of manufacturing systems over the time; especially, it degrades the effectiveness of layout in manufacturing systems. Although the layout of the arrangement of facilities on the shop floor play a significant role in the effectiveness of manufacturing systems, it has not absorbed the attention of researchers in hybrid manufacturing systems. In this paper, a new mathematical model for facility layout in a hybrid cellular manufacturing system has been proposed, which considers demand varying over the planning horizon. The model minimises the material handling cost. To solve the model, a simulated annealing algorithm from literature has been improved. The comparison of results between two algorithms shows the superiority of the improved algorithm in both the quality of solutions and computational time

Inter-cell and intra-cell layout design in a cellular manufacturing system

Facility layout design problems are a group of problems that involve the partitioning of a region into work centers or departments to minimize the costs associated with interactions between the work centers and departments. In cellular manufacturing systems, facility layout problem aims to find the most efficient arrangement of facilities within the machine cells and the layout of machine-cells within the workshop. In this paper, an algorithm for solving layout design has been proposed that arranges the machines within machine cells, and cells in the shop-floor in such a way that minimizes the total material handling cost. To validate the developed algorithm, the results obtained by the algorithm are compared to the results of an exhaustive search. Comparison of results shows the validity of the proposed algorithm

Distribution network design for fixed lifetime perishable products: a model and solution approach

Nowadays, many distribution networks deal with the distribution and storage of perishable products. However, distribution network design models are largely based on assumptions that do not consider time limitations for the storage of products within the network. This study develops a model for the design of a distribution network that considers the short lifetime of perishable products. The model simultaneously determines the network configuration and inventory control decisions of the network. Moreover, as the lifetime is strictly dependent on the storage conditions, the model develops a trade-off between enhancing storage conditions (higher inventory cost) to obtain a longer lifetime and selecting those storage conditions that lead to shorter lifetimes (less inventory cost). To solve the model, an efficient Lagrangian relaxation heuristic algorithm is developed. The model and algorithm are validated by sensitivity analysis on some key parameters. Results show that the algorithm finds optimal or near optimal solutions even for large-size cases

Cost analysis of two different configurations for a distribution network design

One significant decision in supply chain management is to determine the configuration of the supply chain network. However, studies that analyze different configurations are rare in the literature. This paper considers a supply chain network consisting of one supplier and a number of retailers. Two different configurations were proposed and were compared in terms of total cost for the network. In the first configuration, retailers directly order to the supplier and hold the inventory to meet the demand of customers. However, in the second configuration, a number of intermediate facilities were established to order products from the supplier and satisfy the demands of retailers. The inventory of retailers in the latter configuration is stored in the intermediate facilities. These two configurations were compared in terms of total cost. Numerical calculations indicate that the latter configuration was preferred in most cases

Inter-cell and intra-cell facility layout models under different demand environments in cellular manufacturing systems

Facility layout aims to arrange the facilities, including aisles, machines, instruments and tools in the shop floor to provide an efficient layout. Efficiency of layout has tremendous effects on the performance of the system. Cellular Manufacturing System (CMS), as a promising manufacturing system has emerged to manufacture mid-variety, mid-volume products. In a CMS parts based on their similarities are classified into some groups named part families, and different machines are dedicated to produce these parts. The aim of implementation of a CMS is to take advantages of the similarities in the design and manufacturing of products. In the design of cellular manufacturing systems, two important decisions should be made; Cell Formation (CF), and Facility Layout (FL). Cell formation aims to group part families and dedicate each part family to one or more machine cells. The literature in the CF is extensive and abundant but layout models have not absorbed the attention of researchers as much as cell formation. Hence, in the first part of the study, a facility layout model in a CMS is developed that considers unknown locations for machine cells. The model minimizes both inter-cell and intra-cell material handling cost. To solve the model, an algorithm based on Simulated Annealing (SA) is developed in C/C++ namely SA1. Comparison of the results with an adapted algorithm from the literature, in terms of the quality of solutions (material handling cost) shows that the proposed algorithm produces better solutions with a maximum of 0.08% error compared to 0.12% error in the benchmarked algorithm. Moreover, the computation time (CPU Time) of the developed SA algorithm is significantly less than the benchmarked algorithm. In the worst case, the proposed algorithm finds good solutions about 50 times faster than the benchmarked. Cellular manufacturing system is an important technique in the planning and control of manufacturing systems. There are a lot of success stories about its implementation but rapid changes in manufacturing systems may cause a CMS not to perform well in every case. Therefore, it is quite important to investigate the effects of uncertainty of demand of products on the layout of facilities in a cellular manufacturing system. For this purpose, two mathematical models for layout in a CMS are proposed, which considers the stochastic nature of demand. One of the models considers a Normal distribution function for demand, and another one, a Uniform distribution function. In order to validate the models several cases are generated and demonstrated by two methods, Lingo 12.0 optimization software and an enumeration algorithm which is developed in C/C++. The results show that uncertainty in the demand of products can lead to changes in the arrangement of facilities. In a volatile manufacturing system, implementation of a CMS might not be applicable. In such a situation, the use of a Hybrid Cellular Manufacturing (HCM) seems to be more reasonable. Hence, in another part of this study, a model for layout of facilities in a HCM is developed that considers demand of products varies in the planning horizon. To solve the mathematical model, the SA1 is improved, and called SA2. Comparison of the results shows that the SA2 produces better solution quality in terms of the material handling cost with a maximum of 0.06% error compared to 0.08% error in the SA1. In addition, the computation time (CPU Time) of the SA2 is nearly half of the SA1

An integrated inventory location model considering all-unit quantity discount

One of the recent areas in distribution network design is integrated inventory location problems, which jointly determines the inventory control decisions and facility location decisions of a distribution network. A typical distribution network consists of suppliers, several retailers, and several distribution centers. Distribution centers order products from suppliers to fulfil demands of retailers. To achieve risk pooling benefits, inventory of several retailers is aggregated into one distribution center. This situation has made distribution centers more likely to take the advantage of quantity discount from suppliers. However, most previous models have investigated the problem under the basic economic order quantity EOQ with (Q, r) inventory policy and yet quantity discount has not been considered. This paper shows that considering quantity discount instead of EOQ policy can reduce the total cost and change the optimal configuration of the networks