A combined model of network design and production/distribution planning for a supply network

This paper proposes supply network with a global bill of material (BOM). Design and planning problems of supply network in a single combined system were modeled and an experiment was performed on an example problem to confirm the viability of the new, proposed system. The new supply network management system consists of four modules: supply network design optimization module, planning module for production and distribution operations from raw material suppliers to customers, model management module and data management module. The first two modules are solved by a Lagrangian heuristic and a genetic algorithm, respectively. The model and data management modules relieve managers from the difficult task of handling the details of data and mathematical models. Experimental results support our view that the design and planning of supply network problems with a global BOM could be optimized if we adopt appropriate strategies and algorithms. (C) 2002 Elsevier Science Ltd. All rights reserved.