Multi-objective evolutionary approach for supply chain network design problem within online customer consideration

¹ Department of Management Sciences and Decision Making, Tamkang University, No. 151, Yingjuan Road, Danshuei District, New Taipei City 251, Taiwan, Republic of China.
cutepluschung@yahoo.com.tw
² Department of Finance and Actuarial Science, Aletheia University, No. 26, Chenli Street, Danshuei District, New Taipei City 251, Taiwan, Republic of China.

Received: 13 November 2014
Accepted: 22 January 2016

Abstract

Supply chain network design is one of the most important strategic decisions that need to be optimized for long-term efficiency. Critical decisions include facility location, inventory, and transportation issues. This study proposes that with a dual-channel supply chain network design model, the traditional location-inventory problem should be extended to consider the vast amount of online customers at the strategic level, since the problem usually involves multiple and conflicting objectives. Therefore, a multi-objective dual-channel supply chain network model involving three conflicting objectives is initially proposed to allow a comprehensive trade-off evaluation. In addition to the typical costs associated with facility operation and transportation, we explicitly consider the pivotal online customer service rate between the distribution centers (DCs) and their assigned customers. This study proposes a heuristic solution scheme to resolve this multi-objective programming problem, by integrating genetic algorithms, a clustering analysis, a Non-dominated Sorting Genetic Algorithm II (NSGA-II), and a Technique for Order Preference by Similarity to Ideal Solution (TOPSIS). Several experiments are simulated to demonstrate the possibility and efficacy of the proposed approach. A scenario analysis is conducted to understand the model’s performance.