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 usedfor long in order to allow better planning, minimize total cost and improve efficiency. In this paper, a systematicapproach is presented for the facility placement, optimal production planning and product transportation acrossnetwork arcs. An optimization formulation is developed for the determination of production size, locations of networknodes and optimal supply chain. The objective function considered the minimization of transportation cost, productioncost and the operational costs for the facilities. The incorporation of budget constraint, delivery mode, cross-routecosts, maximum flow by a shipping firm, production capacity of the plants, stocking capacity of owned and rentedwarehouses and traffic factors on the supply routes in the mathematical model further broadened the problem. A casestudy is solved to analyze how the model performs with the changing network characteristics