Facility location in responsive and flexible supply chain network design (SCND) considering outsourcing (Q2627413)

Summary: In the last decade, environmental fluctuations of business activities have dictated to organisations to design their supply chains in an efficient way. Also, as regards the diverse needs of customers that is increasing day by day, the manufacturing and service industries cannot deal with these changes unless through contracting out some of their manufactured goods to improve their responsiveness, which is called outsourcing. This paper presents a multi-stage and multi-product mixed-integer linear programming (MILP) model to the responsive and flexible supply chain network design (SCND). The proposed model is able to consider outsourcing, transportation modes, flexibility, cross-docking issue and time monetary value, as a criterion to reduce delivery time, to improve responsiveness of supply chain. Computational results show the outsourcing process has significant effect on the number and location of facilities for opening. Sensitivity analysis illustrates the sensitivity of the proposed model to fixed opening costs, demand of customers and outsourcing costs.