Dynamic supply chain network design with capacity planning and multi-period pricing. (September 2015)

• Record Type: Journal Article
• Authors: Fattahi, Mohammad; Mahootchi, Masoud; Govindan, Kannan; Moattar Husseini, Seyed Mohammad
• Is Part Of: Transportation research. Volume 81(2015)
• Page Start: 169
• Page End: 202
• Publication Date: 2015-09
• Subjects: Dynamic supply chain network design -- Capacity planning -- Multi-period pricing approach -- Simulated annealing -- Linear relaxation-based heuristics; Logistics -- Periodicals; Transportation -- Periodicals; 388.011
• DOI: 10.1016/j.tre.2015.06.007
• Languages: English
• ISSNs: 1366-5545

Abstract

Highlights: Supply chain network design with capacity planning and dynamic pricing is introduced. A mixed-integer linear programming model is developed for the problem. SA is combined with developed linear relaxation-based heuristics as a solution approach. The efficiency of the solution approach is shown by computational results. Some managerial insights are driven from several numerical experiments. Abstract: This paper addresses a new problem in designing and planning a multi-echelon and multi-product supply chain network over a multi-period horizon in which customer zones have price-sensitive demands. Based on price-demand relationships, a generic method is presented to obtain price levels for products and then, a mixed-integer linear programming model is developed. Due to the problem intractability, a simulated annealing algorithm that uses some developed linear relaxation-based heuristics for capacity planning and pricing is presented. Numerical results demonstrate the significance of the model as well as the efficiency of the solution algorithm and linear relaxation-based heuristics.