Supply chain network optimization considering assembly line balancing: A bi-level programming approach

In today’s competitive business environment, the design and management of supply chain network is one of the most important issues that managers encounter. In supply chain optimization problems, determining the location, number and capacity of facilities is concerned as strategic decisions, while mid-term and short-term decisions such as assembly policy, inventory levels, lot sizes and scheduling are considered as the tactical and operational decision levels. This paper addresses how to simultaneously optimize both strategic and tactical decisions in the supply chain network design (SCND). For this purpose, a bi-level programming model is developed in which SCND problem is considered as a strategic decision in the upper-level model, while the lower-level model contains the assembly line balancing as a tactical decision. Based on the structure of the model, a heuristic method is proposed to solve the developed bi-level model. A numerical example is employed to show the performance of developed model and its proposed method in terms of feasibility and convergence.

Keywords:

Supply chain network design , Assembly line balancing , Bi-level programming model , Heuristic method