A TWO-WAREHOUSE SUPPLY CHAIN NETWORK DESIGN AND OPTIMIZATION WITH CROSS-ROUTE COSTS AND BUDGET, MAXIMUM FLOW AND CAPACITY CONSTRAINTS
Supply chain optimization techniques for modelling the behavior of manufacturing supply chains have been used
for long in order to allow better planning, minimize total cost and improve efficiency. In this paper, a systematic
approach is presented for the facility placement, optimal production planning and product transportation across
network arcs. An optimization formulation is developed for the determination of production size, locations of network
nodes and optimal supply chain. The objective function considered the minimization of transportation cost, production
cost and the operational costs for the facilities. The incorporation of budget constraint, delivery mode, cross-route
costs, maximum flow by a shipping firm, production capacity of the plants, stocking capacity of owned and rented
warehouses and traffic factors on the supply routes in the mathematical model further broadened the problem. A case
study is solved to analyze how the model performs with the changing network characteristics.
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