Cost Optimization in Projects Portfolio Supply Chain Network for Procurement Phase

The aim of this research is cost and demand-satisfaction optimization in a 3-level supply chain management for a portfolio of projects at EPC companies including vendors (for procurement of product), warehouses as distribution centers and projects as demand zones. Decisions key to make in designing this portfolio supply chain network is as follows: 1) which of vendors must be selected as products suppliers for satisfying portfolio demands 2) which of the companies warehouses locations must be selected for maintenance of products 3) the amount of products that are shipped among these three levels of portfolio supply chain, whereas it reduces the costs of transporting and warehousing and increases demand satisfying for projects. For optimizing these two objective functions simultaneously, the proposed supply chain model considers some constraints such as warehouses capacities, the maximum production rate of each vendor and shipping costs. For solving this model, Multi-objective optimization particle swarm optimization (MOPSO) as a meta-heuristic solution is used. This algorithm is used to optimize two objective functions and finally decision making of vendors and warehouses and also it leads to demand and storage allocation and monitoring of the flow of product between these levels of the portfolio supply chain.

Keywords:

Procurement of projects portfolio , Location-allocation , Multi-objective modeling , Multi-objective particle swarm optimization algorithm (MOPSO) , Supply chain network