Supply chain network design problem for a new market opportunity in an agile manufacturing system

Authors

Department of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran

Abstract

The characteristics of today's competitive environment, such as the speed with which products are designed,
manufactured, and distributed, and the need for higher responsiveness and lower operational cost, are forcing
companies to search for innovative ways to do business. The concept of agile manufacturing has been proposed
in response to these challenges for companies. This paper copes with the strategic and tactical level decisions in
agile supply chain network design. An efficient mixed-integer linear programming model that is able to consider
the key characteristics of agile supply chain such as direct shipments, outsourcing, different transportation modes,
discount, alliance (process and information integration) between opened facilities, and maximum waiting time of
customers for deliveries is developed. In addition, in the proposed model, the capacity of facilities is determined as
decision variables, which are often assumed to be fixed. Computational results illustrate that the proposed model
can be applied as a power tool in agile supply chain network design as well as in the integration of strategic
decisions with tactical decisions.

Keywords