A bi-objective optimization of supply chain design and distribution operations using non-dominated sorting algorithm: A case study

This paper considers simultaneous optimization of strategic design and distribution decisions for three-echelon supply chain architecture consisting of following three players; suppliers, production plants, and distribution centers (DCs). The key design decisions considered are: the number and location of plants in the system, the flow of raw materials from suppliers to plants, the quantity of products to be shipped from plants to distribution centers, so as to minimize the combined facility location, production, inventory, and shipment costs and maximize fill rate. To achieve this, three-echelon network model is mathematically represented and solved using swarm intelligence based Multi-objective Hybrid Particle Swarm Optimization algorithm (MOHPSO). This heuristic incorporates non-dominated sorting (NDS) procedure to achieve bi-objective optimization of two conflicting objectives. The applicability of proposed optimization algorithm was then tested by applying it to standard test problems found in literature. On achieving comparable results, the approach was applied to actual data of a pump manufacturing industry. The results show that the proposed solution approach performs efficiently. (C) 2013 Elsevier Ltd. All rights reserved.