Stochastic multi-objective production-distribution network design using simulation-based optimization

Abstract

This paper addresses the design of production-distribution networks including both supply chain configuration and related operational decisions such as order splitting, transportation allocation and inventory control. The goal is to achieve the best compromise between cost and customer service level. An optimization methodology that combines a multi-objective genetic algorithm (MOGA) and simulation is proposed to optimize not only the structure of the production-distribution network but also its operation strategies and related control parameters. A flexible simulation framework is developed to enable the automatic simulation of the production-distribution network with all possible configurations and all possible control strategies. To illustrate its effectiveness, the proposed method is applied to a real life case study from automotive industry.