A Four‐Type Decision‐Variable MINLP Model for a Supply Chain Network Design

Abstract

We propose a mixed integer nonlinear programming model for the design of a one‐period planning horizon supply chain with integrated and flexible decisions on location of plants and of warehouses, on levels of production and of inventory, and on transportation models, considering stochastic demand and the ABC classification for finished goods, which is an NP‐hard industrial engineering optimization problem. Furthermore, computational implementation of the proposed model is presented through the direct application of the outer approximation algorithm on some randomly generated supply chain data.