Supply Chain Network Design: Making Decisions & Demand Forecasting - A Case Study Of Lt Company

Abstract

Supply chain network design is a complex decision-making process. It includes layered factors from where the product is sourced, where it is received and distributed, and ultimately reaching the customer. Given the above factors, companies have to decide where to locate new service facilities (e.g. plants, warehouses), how to allocate procurement and production activities to the various manufacturing facilities, and how to manage the transportation of products through the supply chain network to satisfy customer demands. We propose a mathematical modeling framework capturing many practical aspects of network design problems simultaneously. For problems of reasonable size, we report on computational experience with standard mathematical programming software. The discussion is extended with other decisions required by many real-life applications in strategic supply chain planning. In particular, the multi-period nature of some decisions is addressed by a more comprehensive model, which is solved by a specially tailored heuristic approach. The numerical results suggest that the solution procedure can identify high-quality solutions within reasonable computational time.