Robust Global Supply Chain Network Design Under Disruption and Uncertainty Considering Resilience Strategies A Parallel Memetic Algorithm For A Real L PDF

Transportation Research Part E 87 (2016) 20–52
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Transportation Research Part E

journal homepage: www.elsevier.com/locate/tre
Robust global supply chain network design under disruption

and uncertainty considering resilience strategies: A parallel
memetic algorithm for a real-life case study
Aliakbar Hasani a,⇑, Amirhossein Khosrojerdi b
a
School of Industrial Engineering and Management, University of Shahrood, Shahrood, Iran
b
School of Industrial and Systems Engineering, University of Oklahoma, Norman, OK 73019, USA
a r t i c l e i n f o a b s t r a c t
Article history: A mixed-integer, non-linear model is developed for designing robust global supply chain
Received 22 January 2015 networks under uncertainty. Six resilience strategies are proposed to mitigate the risk of
Received in revised form 23 October 2015 correlated disruptions. In addition, an efficient parallel Taguchi-based memetic algorithm
Accepted 23 December 2015
is developed that incorporates a customized hybrid parallel adaptive large neighborhood
search. Fitness landscape analysis is used to determine an effective selection of neighbor-
hood structures, while the upper bound found by Lagrangian relaxation heuristic is used to
Keywords:
evaluate quality of solutions and effectiveness of the proposed metaheuristic. The model is
Global supply chain network design
Robust optimization
solved for a real-life case of a global medical device manufacturer to extract managerial
Resilience strategies insights.
Disruption management Ó 2015 Elsevier Ltd. All rights reserved.
Parallel memetic algorithm
Fitness landscape analysis
1. Introduction
Managing global supply chains has become crucial in recent years due to the increase in globalization and international
competition (Cagliano et al., 2008; Rezapour et al., 2014). Complexity in designing global supply chain (GSC) networks as
increased due to this expansion of GSC across borders as lead-time is necessary among supply chain facilities in order to
cover greater distances. In addition to creating a need for lead-time, globalization also increases the possibility of exposure
to natural disasters, creating more complexity in designing GSC networks as international business environments must man-
age these disruptions and uncertainties (Aydin et al., 2014).
Recent studies indicate growth of more than 1000% in the average cost of disruptive events from the 1960s (Tang, 2006).
The tsunami in Japan in March of 2011 and the typhoon in the Philippines in 2013, for example, disrupted several supply
chains (SC) of global partners. In the two months after the tsunami, Japan’s global merchandise, in terms of exports to its
international SC partners, fell by 14.5% in volume terms (equivalent to 13.3% in value terms) (WTO, 2011). Bueno-Solano
and Cedillo-Campos (2014) analyze the impact of occurrence and propagation of disruptions on the performance of GSCs
and found a roughly 600% increase in the inventory level of GSCs under disruptions versus the same GSC’s under normal
operating conditions. This increase in inventory is mainly due to the security issues on countries’ border areas that lead
to a longer lead-time to meet the demand. In addition, Liberatore et al. (2012) emphasize the importance of analyzing
the propagation impact of disruptive events on the SC’s performance. They point out disruptions should not be considered
as isolated instances, particularly when disruptions are a result of disastrous events, i.e., natural disasters. In designing
⇑ Corresponding author. Tel./fax: +98 23 32392204.

E-mail address: aa.hasani@shahroodut.ac.ir (A. Hasani).
http://dx.doi.org/10.1016/j.tre.2015.12.009
1366-5545/Ó 2015 Elsevier Ltd. All rights reserved.
A. Hasani, A. Khosrojerdi / Transportation Research Part E 87 (2016) 20–52 21
flexible and resilient GSC networks, one must consider an isolated disruption may cause a series of correlated or cascading
disruptions (Madadi et al., 2014; Cantor et al., 2014).
Although flexible and resilience strategies are required when dealing with disruptions, many of strategies (e.g., produc-
tion of semi-manufactured products and keeping inventory) are considered redundancies within some management para-
digms, such as lean and agile production (Christopher and Lee, 2008). Therefore, when selecting flexible and resilience
strategies for mitigating the risk of disruptions, redundancy and efficiency is considered. This leads to the development of
more complex design methods for GSC networks and more efficient solving algorithms to tackle these complex problems
for GSC managers.
The aim of this paper is to design a robust GSC network under uncertainties and correlated disruptions by using a mixed
integer, non-linear model to maximize the total after-tax profit. In order to manage correlated disruptions, six flexible and
resilience strategies are considered concurrently in designing GSC networks: (1) facility dispersion, (2) facility fortification,
(3) production of semi-manufactured products, (4) multiple sourcing, (5) extra inventory, and (6) primary and alternative
bill of material (BOM). The impact of these strategies on the GSC performance is investigated via the statistical sensitivity
analysis. In addition to the occurrence of correlated disruptions in supply chain facilities, two uncertain parameters are con-
sidered: customers’ demands and part procurement cos. In order to manage uncertainties, robust optimization based on the
uncertainty budget approach is considered.
To solve the developed model, an efficient parallel Taguchi-based memetic algorithm incorporating the customized
hybrid parallel adaptive large neighborhood search using the Tabu list (PTMA-TPALNS) is proposed as its local search. The
TPALNS uses a fitness landscape analysis and a Tabu list concept to improve the systematic procedure of neighborhood struc-
ture selection. The effectiveness of parallelization of the proposed solution algorithm is shown via extensive computational
experiments. The proposed mathematical model is solved for a real-life case study of a global medical device manufacturer,
which we have named XEM for the purpose of confidentiality. XEM intends to enter the market of a country in the Middle
East as well as its two neighboring countries.
The remainder of this study is organized as follows. In Section 2, a review of the relevant literature of designing GSC net-
works is presented. In Section 3, the research problem is properly explained. In Section 4, the proposed mathematical model
for designing robust GSC networks is presented. The proposed PTMA-TPALNS is introduced in Section 5, and the computa-
tional experiments, results, and managerial insights are presented in Section 6. Finally, the conclusions and future directions
are presented in Section 7.
2. Literature review
In this paper, two contributions are presented, the proposed model for GSC networks under disruptions and uncertainties,
and the proposed solution algorithm. In this section, several aspects of global supply chain network design (GSCND) studies,
international considerations in GSCND, disruption and uncertainty considerations in GSCND, as well as solution algorithms
for GSCND models, are reviewed. Interested readers are referred to Hammami et al. (2008) and Hasani et al. (2015) for recent
reviews of the relevant studies of GSCND.
2.1. International considerations in GSCND
Accessibility to low-cost resources, large markets, and potential incentives for international investments are economic
and competitive advantages that encourage considerable attention toward designing and managing GSC model develop-
ments (Meixell and Gargeya, 2005; Hammami et al., 2008; Hammami and Frein, 2013). In designing GSC networks, various
international considerations, such as international logistic issues (Hammami and Frein, 2013), exchange rates (Hammami
et al., 2009; Vidal and Goetschalckx, 2001), tax rates (Guillen-Gosálbeza and Grossmann, 2010; Perron et al., 2010),
import/export tariffs (Goh et al., 2007), as well as state foreign trade and investment regulations (Hasani et al., 2015;
Wilhelm et al., 2005) should be taken into account (Hasani et al., 2015; Wilhelm et al., 2005). In addition, locating global
facilities (Hammami et al., 2009), selecting location of manufacturing or distribution facilities (Hammami and Frein,
2013), selecting technologies (i.e., technology implementation and operation costs are dependent to the location of facilities)
(Guillen-Gosálbeza and Grossmann, 2010), and assigning transportation costs between different partners (Goetschalckx
et al., 2002; Perron et al., 2010) should be considered in designing GSCN models.
Also important when designing GSCN models, particularly where supply chain performance is concerned, is regional and
international trade agreements (Hasani et al., 2015; Wilhelm et al., 2005). Tax rates, transfer price regulations (the price for a
product that the selling subsidiary charges the buying subsidiary of a company (Perron et al., 2010)), and import tariffs are
examples of factors in global supply chains that are affected by regulations set by economic unions (Goetschalckx et al.,
2002; Wilhelm et al., 2005; Wu, 2012; Hammami and Frein, 2014). The transfer prices play a key role in the global supply
chain networks and are highly correlated with the location decisions. Most companies are motivated by the possibility of
manipulating transfer prices in order to shift profits from countries where income taxes are relatively high towards low
tax countries to maximize their global after tax profit (Hammami et al., 2008).
As such, the transfer price is an important policy for companies restricted by various state laws (Guillen-Gosálbeza and
Grossmann, 2010; Perron et al., 2010). Wilhelm et al. (2005) present a model for GSC networks under the North American
22 A. Hasani, A. Khosrojerdi / Transportation Research Part E 87 (2016) 20–52
Free Trade Agreement (NAFTA). Robinson and Bookbinder (2007) develops a mixed-integer programming model to design a
GSC considering NAFTA in order to minimize the total cost of GSCs. Utilization of opportunities offered by NAFTA are con-
sidered in the proposed model by Robinson and Bookbinder (2007). Hasani et al. (2015) propose a comprehensive model of
the closed-loop GSCND for a medical device manufacturer under the Economic Cooperation Organization Trade Agreement
(ECOTA).
Despite the various GSCND models proposed in the literature, the necessity of further development of these models is felt
by practitioners in order to increase the effectiveness of the GSCND models and develop additional accommodations with the
continuous change of business environments.
2.2. Disruptions in GSCND
Global supply chain networks are faced with uncontrollable incidents and disruptions (Elkins et al., 2005; Corominas,
2013). Supply chain facilities are exposed to disruptions due to various failures, such as man-made failures, natural disasters,
transportation delay, and power outages (Pengn et al., 2014; Marufuzzamana et al., 2014; Gedik et al., 2014; Khosrojerdi
et al., 2016). A conceptual model for managing disruptions is proposed by Kleindorfer and Saad (2005) in which risks in sup-
ply chains are considered. In order to design a responsive and resilient supply chain network under disruptions, effective
resilience strategies are required, such as multiple sourcing, extra inventory, and demand postponement (Bunschuh et al.,
2006; Costantino et al., 2012; Tang, 2006; Choi et al., 2012). Bunschuh et al. (2006) propose an approach encouraging cus-
tomers to supply their demand from multiple sources, while observing supply shortages in the face of disruptions. Tang
(2006) mentions the importance of designing supply chains under disruptions and proposes a set of robust managerial
strategies, such as keeping additional inventory in warehouses and postponing the meet of demand in order to manage dis-
ruptions. Park et al. (2013) present best practices and lessons learned from several catastrophic natural disasters which
affected global supply chains in Japan. Khosrojerdi et al. (2016) present a robust optimization approach for a mixed-
integer non-linear programming (MINLP) model while random failures and intentional attacks happen in a power supply
network.
Various mathematical models for different business environments and disruption occurrences are developed to employ
the aforementioned resilience strategies. Aryanezhad et al. (2010) propose a stochastic integer non-linear programing (INLP)
model for the supply chain network design which uses extra inventory to decrease the impact of disruptions. Jabbarzadeh
et al. (2014) propose a comprehensive robust network design model for the blood supply during and after disasters in a real
case study. Chen et al. (2011) propose an inventory-location supply chain network design (SCND) model, when failures occur
with predetermined probabilities. Peng et al. (2011) propose a mixed-integer linear programming (MILP) SCND model in
which disruption occurrences are modeled using the robust optimization approach and p-robustness criterion. A tri-level
formulation for a capacitated median location problem is proposed by Liberatore et al. (2012). They consider protective
resources that take into account the partial damage of capacitated facilities involving areas rather than single facilities.
Costantino et al. (2012) present a MILP model for designing an agile supply chain by considering the multi-source supply
in managing disruptions. Wang (2013) proposes a mathematical model to consider disruptions and demand uncertainty
using process flexibility and extra inventory strategies. Benyoucef et al. (2013) present a mathematical model for designing
a supply chain network with consideration of reliable and unreliable suppliers. Li et al. (2013) investigate the impact of
adopting the facility fortification strategy under the budget constraint for both P-median and uncapacitated fixed-charge
location problems in improving the reliability of disrupted networks. Fang et al. (2013) propose a model in order to examine
the performance of a wide variety of sourcing strategies for a manufacturer under supplier disruptions. Wu et al. (2012) pro-
pose a discrete time model for the assembly structure of supply chain network problems under disruptions and address its
wide variety of applications. Baghalian et al. (2013) propose a stochastic mathematical formulation for designing a multi-
level supply chain network under disruption and uncertainty in both supply and demand sides for multiple products.
Hishamuddin et al. (2014) propose a real-time recovery mechanism to determine a recovery schedule for disrupted produc-
tion facilities using a two-stage supply chain network design model. Schmitt et al. (2015) compared the impact of supply
disruptions and demand uncertainty on the performance of a centralized two-echelon inventory system to that of a decen-
tralized one. They found the decentralized inventory system fared better in cost variance reduction through the risk diver-
sification effect than the centralized system. Azad et al. (2014) present a method for designing a reliable stochastic supply
chain network in the presence of random disruptions which may occur in both distribution centers and transportation
modes.
Despite these various models for designing supply chain networks under disruptions, there is no study in the literature to
consider designing global supply chain networks (GSCN) under disruptions. In addition, there is no comprehensive study to
simultaneously incorporate multiple resilience strategies for designing local and global supply chain networks and investi-
gate the impact of each strategy on the performance of supply chain networks.
2.3. Uncertainty considerations in GSCND
Another consequence of the expansion of supply chains across borders is uncertainty from internal and external
sources such as the change of demographics and political conditions, the availability of raw materials, and the fluctuation
of energy prices (Goh et al., 2007; Zsidisin, 2003; Wu and Zhan, 2014; Vahdani et al., 2012; Ivanov and Sokolov, 2013;
Table 1
Feature comparison between the proposed GSCND model and existing related studies.
Vidal and Verter and Wilhelm Sousa et al. Goh et al. Hammami Perron Aryanezhad Bogata Hasani The proposed
Goetschalckx Dasci (2002) et al. (2005) (2006) (2007) et al. (2009) et al. et al. (2010) et al. et al. GSCND model
(2001) (2010) (2011) (2014)
Parameters
A. Hasani, A. Khosrojerdi / Transportation Research Part E 87 (2016) 20–52

Multi-period – – * * – * – – * * *
Multi-product – * * * – * – – – * *
Constraints
Facility capacity * * * * * * * * * *
Technology selection * – * – * * – – – – –
Regional rules – – * – – – – – – * *
Keeping an inventory – – * * – * – * – * *
BOM * – * – * * – * * *
Transfer price limitation * – * * – * * – – * *
Disruption consideration
Facility capacity – – – – – – – – – – *
Strategy for dealing with disruption
Facility reinforcement – – – – – – – – – – *
Multiple sourcing – – – – – – – – – – *
Considering primary and – – – – – – – – – – *
alternative BOM
Semi-manufactured – – – – – – – – – – *
products production
Facility dispersion – – – – – – – – – – *
Uncertainty consideration
Customer demand – – – – * – – * – * *
Facility capacity – – – – * – – – – * *
Supplying cost – – – – – – – – – * *
Handling uncertainty – – – – SP – – SP – RO RO
Objective Function
Financial * * * * * * * * * * *
RO i.e., robust optimization.

SP i.e., stochastic programming.
23
Bozorgi-Amiri et al., 2013). Therefore, uncertainty of GSC parameters and the vulnerabilities they cause should be addressed
properly in GSCND models (Hasani et al., 2015). However, few studies consider designing GSC networks under uncertainty.
Goh et al. (2007) propose a stochastic model for considering various GSC uncertainties, including customers’ demand, suppliers’
capacity, and exchange rates. Aryanezhad et al. (2010) propose a stochastic GSCND model for considering uncertainty of
customers’ demand using probabilistic demand scenarios. Singh et al. (2012) present a model of the multi-stage GSCND prob-
lem incorporating various scenario-based risk factors, including the late shipment, exchange rates, quality problems, logistics
and transportation breakdown, and production risks.
Applications of stochastic programming techniques for large-scale GSCND models are limited because of the shortage of
historical data for fitting probability distributions for uncertain parameters (Hasani et al., 2012). A robust optimization
approach could be adopted to handle uncertain parameters. This approach provides the feasible solution under all possible
realizations of uncertain parameters within their bounds with the best objective function value between all the robust
feasible solutions (Baohua and Shiwei, 2009; Hasani et al., 2012). Hasani et al. (2015) propose a robust optimization model
based on the uncertainty budget concept to consider uncertain parameters in GSC network design. Interested readers are
referred to Simangunsong et al. (2012) for more information on modeling uncertainties in supply chains.
2.4. Solution algorithms for GSCND models
Efficiency of exact algorithms is limited when dealing with large size instances (Hammami et al., 2009). Various heuristic
algorithms are proposed in the literature of GSCND models to overcome the complexity of solving such models from both the
quality and computational time perspectives (Hammami et al., 2009; Kchaou Boujelben et al., 2014; Badri et al., 2013; Nazzal
et al., 2012). Vidal and Goetschalckx (2001) propose a successive linear programming problem obtained from the reformu-
lation and relaxation of the proposed problem. In another study, a Lagrangian heuristic is adopted by Hammami et al. (2009)
to solve a large-scale, non-linear GSCND problem. By increasing the necessity of considering the requirements of real-life
global business environments in GSC models as well as the NP-hard nature of these problems, more capable solution algo-
rithms need to be developed (Hasani et al., 2015). Various meta-heuristics algorithms have been proposed to solve GSCND
problems. The variable neighborhood search (VNS) proposed by Perron et al. (2010) outperforms and is more efficient than
the heuristic solution algorithm proposed by Vidal and Goetschalckx (2001). Hasani et al. (2015) propose an efficient hybrid
heuristic based on the memetic algorithm (MA) that incorporates an adaptive VNS search as its local search heuristic to solve
the GSND problem. Despite all these models, there is still need to develop more powerful and efficient solution algorithms
for solving complex GSCND problems.
The first contribution in this paper is the formulation of the GSC networks under correlated disruptions and uncertainties.
To the best of our knowledge, our proposed GSCND model is the first robust model in the context of GSC design that takes
into account six flexible and resilience strategies simultaneously in designing robust GSC networks under correlated disrup-
tions and uncertainties. The research gap is shown in Table 1 by addressing some of the key features of recent studies in the
GSC network design literature. This comparison shows how well our proposed GSC network design model is adopted to the
GSC context compared to the existing literature.
The second contribution of this paper is in our proposed algorithm. An efficient hybrid parallel meta-heuristic based on
the Taguchi-based memetic algorithm is developed, incorporating customized hybrid parallel ALNS as its local search heuris-
tic. In general, parallelization attempts to explore more parts of solution space as well as reduce central processing unit time.
The approach of landscape analysis is utilized to improve the systematic procedure of neighborhood structures in the pro-
posed parallel ALNS. The efficiency of the proposed hybrid solution algorithm is investigated by comparing its performance
with results obtained from optimization software and another meta-heuristic algorithm used to solve the proposed problem.
Finally, our proposed mixed-integer non-linear programming (MINLP) model is solved for a real-world case study of an
electro-medical device manufacturer, referred to as XEM, in three international markets. In the next section, the problem
statement regarding XEM is explained.
3. Problem definition: the case of elector-medical device manufacturer
The aim of the proposed model for XEM is to design its GSC network configuration based on the characteristics of the
considered international business environment. The best configuration of the GSC network is determined by incorporating
various strategic and tactical decisions. These decisions include the selection of global facility locations, production planning,
transportation planning, purchasing planning, pricing planning and resilience strategies while disruptions occur. As borders
of the XEM supply chain network extend across ECOTA member countries, the international regulations imposed by ECOTA
as well as state regulations (e.g., import tariffs, transfer price regulations, and tax rates) should be considered (see Fig. 1 and
Table 2).
The XEM Company faces various strategic decisions in designing its GSC network, including the selection of its suppliers,
and distribution and manufacturing sites; however, these decisions should be made in a volatile business environment. In
particular, the occurrence of disruptions is one of the major threats to the GSC’s performance. There are various risk regions
within the borders of the XEM’s supply chain network. Experts of XEM define the risk of disruptions in each region based on
their own knowledge, historical data, and a seismic map of the Middle East. The occurrence and the impact of correlated
Country A Country B
Wholesaler 2
Supplier Manufacturer 2
1
Manufacturer 1
Supplier
2
Wholesaler 1 Distributor 2
Distributor 1
Country C
Transportation of components from
suppliers to manufacturer Supplier Manufacturer 3
Transportation of products from 3
manufacturer to warehouses Distributor 3
Transportation of products from
warehouse to wholesalers
Wholesaler 3
Each country border
Fig. 1. The schematic overview of the studied GSC network.
disruptions (i.e., cascading disruptions in which one disruption may cause other one) are defined as pre-determined scenar-
ios with assigned occurrence probability. The occurrence probability for each scenario is defined based on various factors,
such as the possibility of the occurrence of natural disasters (e.g., earthquakes) in each region. The impact of correlated dis-
ruptions is determined based on the dependency among supply chain facilities, which may cause partial or complete outage
of the capacity of facilities. Earthquakes in one area, for example, may affect the performance of facilities in neighboring
areas. In order to mitigate the impact of disruptions on the performance of GSC networks, six pre-disruption (i.e., proactive
strategies) and post-disruption (i.e., reactive strategies) resilience strategies are defined for designing robust GSC networks
under correlated disruptions. These strategies are explained in Table 3. As is shown in Table 3, the first five resilience strate-
gies (i.e., facility dispersion, facility fortification, production of semi-manufactured products, multiple sourcing, and extra
inventory) are pre-disaster or proactive resilience strategies, and using primary and alternative bill of material (BOM) is a
post-disruption or reactive resilience strategy.
In addition to the correlated disruptions, XEM faces two uncertainties: the product demand and the part procurement
cost uncertainties. In the proposed model, these two uncertain parameters are modeled using the concept of the uncertainty
Table 2
The properties of the XEM Company’s GSC.
Properties The countries within the SC scope

A country in the Middle East (C1) Neighbor 1 (N1) Neighbor 2 (N2)
Number of potential supplier facilities 10 6 4
Number of potential manufactures’ facilities 8 2 2
Number of potential warehouse facilities 18 12 8
Table 3
Employed resilience strategies for dealing with disruptions.
Strategy Domain of strategy Effect of strategy on supply chain operation

implementation
Facility reinforcement Supplier, manufacturer, Improving capacity resistance against disruptions
and warehouse
Multiple sourcing Supplier Reducing dependence on a single supplier
Production of Semi- Manufacturer Dealing with part shortage
manufactured products
Facility dispersion Supplier, manufacturer, Decreasing supply chain risk as a consequence of supply chain centralization and facilities’
and warehouse condensation in the same regions with high risk level
Keeping an inventory Warehouses Dealing with the finished product shortage as a consequence of capacity disruption of
facilities in the upper tiers
Considering primary and Manufacturer Dealing with part shortage
alternative BOM
budget in the interval robust optimization (Bertsimas and Sim, 2004). This concept corresponds to real-world situations,
where the probability of all uncertain parameters is very small in deviating from their nominal values. Therefore, the number
of the uncertain parameters deviating from their nominal values is bounded by a predetermined value named the uncer-
tainty budget. This value represents the decision maker’s degree of conservativeness. Smaller values represent a limited
effect of uncertainty (i.e., a risk-neutral model), while larger values depict a more significant effect (i.e., a risk-averse model)
(Nikbakhsh et al., 2013). The objective of our proposed model is to maximize the total net present value (NPV) of the after-
tax profit of the GSC network of XEM during a planning horizon under normal and disrupted conditions, wherein both the
demand and procurement cost of parts are considered as uncertain parameters. In the next section, the mathematical model
for designing GSC networks is presented.
4. Mathematical model
In this section, the proposed MINLP model for designing robust GSC networks under disruptions and uncertainties is
explained.
4.1. Notation
– Indices
N and T: Sets of disruption scenarios and planning periods, respectively
K; M and I: Sets of supplier, manufacturer, and distributor facilities, respectively
V and E: Sets of final products and parts of products, respectively
O and R: Sets of wholesalers (i.e., customers) and risk regions, respectively
– Parameters
probn : Probability of occurrence scenario n
wov t : Nominal demand weight of wholesaler o for product v in period t
w1ov t : The shift value of demand of product v for wholesaler o in period t
fmmt ; rfmmt ; and cfmmt : Fixed cost of establishing, fortifying, and keeping located manufacturer m, respectively, for two
consecutive periods
budt : Total available budget for fortifying facilities in period t
fwit ; rfwit ; and cfwit : Fixed cost of establishing, fortifying, and keeping located distributor i, respectively, for two con-
secutive periods
fskt ; rfskt ; and cfskt : Fixed cost of selecting, fortifying, and resuming cooperation with supplier k, respectively, for two
consecutive periods
coregn : Fraction of lost capacity in facility g when facility e is disrupted under scenario n (i.e., e; g 2 ðM [ K [ OÞÞ
ml and r: Sufficiently large positive number and interest rate, respectively
dosnrt : Disruption occurrence indicator in region r under scenario n in period t (i.e., 1 if a disruption occurs; 0
otherwise)
t1ke ; t2mv ; t3mv ; and v sc : Occupied capacity of supplier k for supplying part e, occupied capacity of manufacturer m for
producing final product v , occupied capacity of manufacturer m for completing semi-manufactured productv, and
amount of occupied space by product v, respectively
snum: Minimum number of supply sources
copkev t and copskev t : Procurement cost and its shift value for a unit of part e of product v from supplier k, respectively,
in period t
dov t and d1sov t : Demand and its shift value for product v of wholesaler o, respectively, in period t
uasek : Upper bound on the amount of part e that could be supplied by supplier k
utpsmkment and ltpsmkment : Upper and lower bound on the transfer price of part e transferred between supplier k and
manufacturer m
utpmwmiv nt and ltpmwmiv nt : Upper and lower bound on the transfer price of product v transferred between manufac-
turer m and distributor i
exrsk ; exrmm and exrwi : Exchange rates for converting different currencies of suppliers, manufacturers, and distribu-
tors, respectively, to a unique currency
atpskt ; atpmmt and atpwit : Tax rate of suppliers, manufacturers, and distributors, respectively, in period t
hcov it : Cost of holding a unit of product v in distributor i in period t
shpc1kmet ; shpc2miv t ; and shpc3iov t : Transportation costs of part e from supplier k to manufacturer m, product v from
manufacturer m to distributor i; and product v from distributor i to wholesaler o, respectively, in period t
prdcv mt : Cost of producing a unit of product v by manufacturer m in period t
pcscv ot and shcv ot : Selling price and cost of not satisfying demand, respectively, of product v at wholesaler o in period t
cbud1kt ; cbud2kt ; and cbud3kt : Budgets of uncertainty for procurement cost of parts
dbud4ov t : Uncertainty Budget of demand of final product v at wholesaler o in period t
conv e : Consumption ratio of part e for manufacturing product v
tcapskt and rcapsk : Total and fortified supply capacity, respectively, of supplier k in period t
tcapmmt and rcapmmt : Total and reinforced production capacity, respectively, of manufacturer m in period t
tcapmmt and rcapmm : Total and fortified capacity of production semi-manufactured products of manufacturer m,
respectively, in period t
tcapwit and rcapwi : Total and fortified storage capacity of distributor i, respectively, in period t
trfkmet and trmmiv t : Import tariff rate of part e from supplier k to manufacturer m and product v from manufacturer m to
distributor i, respectively, in period t
fnrt ; anrt ; and wnrt : Maximum number of selected supplier, and located manufacturer and distributors in risk region r,
respectively, in period t
dcapwint : Disrupted storage capacity of distributor i under scenario n in period t
dcapskn : Disrupted supply capacity of supplier k under scenario n in period t, and
dcaprmmn and dcapmmn : Disrupted storage capacity of semi-manufactured and final products of manufacturer m under
scenario n, respectively, in period t
– Variables
EF krt : 1 if supplier k in region r is selected in period t; 0 otherwise
ERF krt : 1 if supplier k in region r is reinforced in period t; 0 otherwise
EW irt : 1 if distributor i in region r is located in period t; 0 otherwise
ERW irt : 1 if distributor i in region r is reinforced in period t; 0 otherwise
EAmrt : 1 if manufacturer m in region r is located in period t; 0 otherwise
ERAmrt : 1 if manufacturer m in region r is reinforced in period t; 0 otherwise
C iov tn : Amount of final product v transferred from distributor i to demand point o under scenario n in period t
SC1iov tn : Amount of demand of product v at wholesaler o which is not satisfied under scenario n in period t
CZ miv nt : Amount of final product v transferred from manufacturer m to distributor i under scenario n in period t
CFX km1v tn and CIX kmev tn : Quantity of part 1 (i.e., irreplaceable part) and e (i.e., replaceable part) of product v transferred
from supplier k to manufacturer m, respectively, in period t under scenario n
CSX kmev tn : Quantity of part e of product v transferred from supplier k to manufacturer m to complete semi-
manufactured product v in period t under scenario n
CY mv tn ; CSRMmv tn ; and CIZ mv tn : Quantity of final and semi-manufactured product v, as well as the shortage amount of
part 1 to manufacture product v via manufacturer m, respectively, in period t under scenario n
CFXROkmv ent ; CIXROkmv ent ; and CSXROkmv ent : First supplementary variables for creating the robust counterpart of pur-
chasing cost uncertainty
CFPROkmv etn ; CIPROkmv etn ; and CSPROkmv etn : Second supplementary variables for creating the robust counterpart of pur-
chasing cost uncertainty
CFZROktn ; CIZROktn ; and CSZROktn : Third supplementary variables for creating the robust counterpart of purchasing cost
uncertainty
ZSket : 1 if supplier k is selected for supplying part e in period t; 0 otherwise
DO1v nt : 1 if demand of product v is not satisfied under scenario n in period t, 0 otherwise
TPSM kment : Transfer price of part e that is shipped from supplier k to manufacturer m in period t under scenario n
TPMW miv nt : Transfer price of product v that is shipped from manufacturer m to distributor i in period t under scenario n
INV iv nt : Inventory of product v in distributor i at the end of the period t under scenario n
þ þ
p1þ ktn p1ktn ; pmtn pmtn ; pitn pitn : Positive before-tax profit (loss) of supplier k, manufacturer m, and distributor i,
respectively, during period t under scenario n
ZRO1ov tn : First supplementary variable for creating the robust counterpart of the product demand uncertainty
PRO1ov tn : Second supplementary variable for creating the robust counterpart of the product demand uncertainty.
4.2. Mathematical model formulation
4.2.1. Objective function

The aim of the objective function, as shown in Eq. (1), is to maximize the total net present value of the GSC after-tax profit.
The exchange rate parameters are used to convert different currencies of corresponding supply chain facilities to a unique
currency, such as the currency of the parent company. In addition, the income taxes should be paid only on profits from
supply chain facilities and not on losses.
8X 9
>
> exrskt ð1 atpskt Þ p1þktn p1ktn >
>
>
> >
>
>
> k
X >
>
X < =
Maximize probn
1 þ exrm mt ð1 atpm mt Þ p 2 þ
mtn p 2
mtn ð1Þ
t1 > >
ð1 þ r Þ > > X
m
>
>

t;n
>
> >
>
: þ exrwit ð1 atpwit Þ p3itn p3itn
þ
> >
;
i
4.2.2. Constraints
The constraints of the proposed mathematical model are as follows. The total before-tax profit of each supplier is calcu-
lated in Eq. (2). The supplier’s revenue is calculated based on the sold parts at the transfer prices. The supplier cost includes
the transportation cost of parts, the selection cost of suppliers for the first time, the cooperation cost with selected suppliers,
the facility reinforcement cost of suppliers, and the procurement cost of parts.
X X
p1þktn p1ktn ¼ tpsmkment CFX kmv 11n þ ðCSX ikmv 11n Þjt–1 þ tpsmkment CIX kmv 11n
m;v m;v ;e–1
X X
ðshpc1kmet þ copkev t Þ CFX kmv 11n þ ðCSX ikmv 11n Þjt–1 CFPROkmv 11n cbud1k1
m;v m;v
X X
fskt max EF krt EF kr;t1 tP2 ; 0 ðshpc1kmet þ copkev t Þ ðCSX ikmv 11n Þjt–1
r m;v ;e–1 ð2Þ
!
X X X

CIZROk1n CIPROkmv e1n cbud2k1 rfskt ERF krt cfsk SF k;r;t1 SF krt tP2
m;v m;v ;e
r
!e–1
X X X

CSZROk1n CSPROkmv e1n cbud3k1 CFZROk1n 8k; 8t; 8n
m;v m;v ;e
m;v e–1
In Eq. (3), the total before-tax profit of each manufacturer is calculated. Revenue of each manufacturer is calculated from
selling finished products to distributors. The manufacturer’s cost includes the cost of purchasing parts from suppliers, trans-
portation and production of products, the manufacturer’s site establishment for the first time, the manufacturer’s facility
reinforcement, and continuing facility operations after establishment.
X X
pþmtn pmtn ¼ TPMW miv nt ðCZ miv nt þ CRZ miv nt Þ ð1 þ Trfkmet Þ TPSM kment Cixkmev tn
i;v k;e
X X
ð1 þ Trfkmet Þ TPSM kment Cfxkm1v tn SHPC2miv ðCZ miv nt þ CRZ miv nt Þ
k i;v
X X X
þ Prdcv mt ðCY mv tn þ CSRMmv tn Þ FW mt max EAmrt EAmr;t1 tP2 ; 0 RFMmt ERAmt
v r r
X
CFM mt ðEAm;r;t1 EAmrt ÞtP2 ð1 þ Trfkmet Þ TPSMkment Csxkmev tn 8m; 8t; 8n
k;e
ð3Þ
In Eq. (4), the before-tax profit of each distributor is calculated. The distributor revenue is calculated from selling finished
products to wholesalers. The distributor cost includes the cost of purchasing products from manufacturers, transporting
products, holding products, locating a distributor facility for the first time, not satisfying the demand of a wholesaler, and
resuming utilization of a facility after its establishment.
X X
pþitn pitn ¼ Pcscv ot C iov nt ð1 þ Trmmiv t Þ TPMW miv nt ðCZ miv nt þ CRZ miv nt Þ
o;v m;v
X X X X
HCOv it Inv iv nt SHPC3iov t C iov nt SHC v ot LW ov nt RFW it ERW irt ð4Þ
v o;v o;v r
X
FW it max EW irt EW irt jtP2 ; 0 CFW i EW ir;t1 EW irt tP2 8i 2 S; 8n; 8t
r
Using the first, second, and third supplementary variables as parts of the robust counterpart of Eq. (2) due to the interval
uncertainty of the part procurement cost are formulated in Eqs. (5)–(10). Interested readers are referred to Bertsimas and
Sim (2004) for further details on the interval robust optimization technique based on the uncertainty budget concept.
CFZROktn CFPROkmv 1tn P copk1v t CFXROkmv 1tn 8k; 8m; 8v ; 8t; 8n ð5Þ
CFXROkmv 1tn 6 CFX kmv 1tn 6 CFXROkmv 1tn 8k; 8m; 8v ; 8t; 8n ð6Þ
CIZROktn CIPROkmv etn P copskmv en CIXROkmv etn 8k; 8m; 8v ; 8t; 8n; e 2 f2; 3g ð7Þ
CIXROkmv etn 6 CIX kmv etn 6 CIXROkmv etn 8k; 8m; 8v ; 8t; 8n; e 2 f2; 3g ð8Þ
CSZROktn CSPROkmv 1tn P copskm1n CSXROkmv 1tn 8k; 8m; 8v ; 8n; t P 2 ð9Þ
CSXROkmv 1tn 6 CSX kmv 1tn 6 CSXROkmv 1tn 8k; 8m; 8v ; 8n; t P 2 ð10Þ
The reinforcement budget limitation of the GSC in each time period is shown in Eq. (11).
X X X
ðrfskt ERF kt Þ þ ðrfmmt ERAmt Þ þ ðrfwit ERW it Þ 6 budt 8t ð11Þ
k m i
The supply capacity of each supplier in each time period is shown in Eqs. (12)–(14) by considering the effects of disrup-
tion occurrences and the reinforcement strategy. The impact of disruption occurrences on the capacity of suppliers can be
diminished through using the reinforcement strategy.
0X 1 X
t1kmv 1t CFX kmv 1tn þ CSX kmv 1tn jtP2 þ 0 1
B v ;m C tcapskt dosnrt corekn dcapskn
B X C6@ e2ðM[K[OÞ A EF krt 8k; 8n; 8r; 8t
@ A
t1kmv et CIX kmv etn þrcaps ERF kt krt
v ;m;e–1
ð12Þ
ERF krt 6 EF krt 8k; 8r; 8t ð13Þ

X
ERF krt 6 1 8k; 8r ð14Þ
t
The possibility of supplying parts from multiple sources is shown in Eqs. (15)–(17). The minimum number of sources
(i.e., snum) depends on the company’s policies on the strategic supplier relationship management (e.g., single or multiple
sourcing strategies). In the proposed model, the minimum number of suppliers for all parts is considered greater than or
equal to one.
X
ml ðZSket 1Þ < CFX kme1tn þ CSX kmv 1tn jtP2 6 ml ZSket 8k; 8n; 8t ð15Þ
m;v
X
ml ðZSket 1Þ < CIX kmv etn 6 ml ZSket 8k; 8n; 8t; e – 1 ð16Þ
m;v
X
ZSket P snumet 8t; e ð17Þ
k
It is ensured that the consumption ratio of parts for each product is satisfied according to the product BOM in Eq. (18).
! ! !
conv e X conv e X conv e X
ðCFX kmv 1tn þ CSX kmv 1tn Þ ¼ CIX kmv 2tn ¼ ¼ CIX kmv jEjtn
bv 1 k;t
bv 2 k;t
bcjEj k;t
X
¼ ðCZ mlv tn þ CRZW mlv tn Þ 8m; 8v ; 8n ð18Þ
i;t
The production capacity of each manufacturer in each time period is shown in Eqs. (19)–(21) by considering the impact of
the reinforcement strategy and disruption occurrences. Each manufacturer facility could be reinforced at most for one period
of time. Employing a reinforcement strategy in each manufacturer facility can reduce the impact of disruption occurrences
on its production capacity.
! 0 X 1
X t2mv CY mv tn tcapmmt dosnrt coremn dcapmmn
6@ e2ðM[K[OÞ A EAmrt 8m; 8n; 8r; 8t ð19Þ
v þt3mv CRZ mv tn jtP2
þrcapmmt ERAmrt
ERAmrt 6 EAmrt 8m; 8r; 8t ð20Þ

X
ERAmrt 6 1 8m; 8r ð21Þ
t
The storage capacity of each distributor in each time period is shown in Eqs. (22)–(24) by considering the impact of the
reinforcement strategy and disruption occurrences. Each distributor facility could be reinforced at most for one period of
time. Employing the reinforcement strategy for each distributor facility, the impact of disruption occurrences on its storage
capacity can be reduced.
! 0 X 1
X CZ miv tn tcapwit dosnrt cor ein dcapwin
v sv
þSiv ;t1;n tP2
6@ e2ðM[K[OÞ A EW it 8i; 8n; 8t ð22Þ
m;v þrcapwit ERW irt
ERW irt 6 EW irt 8i; 8r; 8t ð23Þ

X
ERW irt 6 1 8i; 8r ð24Þ
t
The strategy of dispersing supply chain facilities is shown in Eqs. (25)–(27). These equations ensure that facilities of the
GSC are dispersed within different risk regions to reduce their vulnerability against disruptions.
X
EF krt 6 fnrt 8r; 8t ð25Þ
k
X
EAmrt 6 anrt 8r; 8t ð26Þ
m
X
EW irt 6 wnrt 8r; 8t ð27Þ
i
It is ensured that required parts are shipped to each located manufacturer based on the allocated demand, as shown in
Eqs. (28) and (29).
X X
CFX kmv 1tn þ CSX kmv 1tn jtP2 P CZ miv tn þ CRZ miv tn jtP2 8m; 8v ; 8n; 8t ð28Þ
k i
X X
CIX kmv etn P CZ miv tn 8m; 8v ; 8n; e 2 f2; 3g; 8t ð29Þ
k i
The amount of semi-manufactured products that are manufactured in each period due to the shortage of a specific part
(i.e., part 1Þ is calculated in Eq. (30).
X X
CIZ mv tn P CIX kmv etn CFX kmv 1tn 8v ; 8m; 8n; e – 1; 8t ð30Þ
k k

CSRMmv tn ¼ CIZ mv tn þ CSRMmv ;t1;n tP2 CRZ mv tn jtP2 8v ; 8m; 8v ; 8t ð31Þ
It is ensured that the amount of semi-manufactured products in each time period is less than the manufacturer storage
capacity, as shown in Eq. (32).
X
tcaprmmtn dosnrt dcaprmmtn
v v CSRMmv tn 6 EAmt 8m; 8n; t P 2 ð32Þ
v þrcaprmmtn ERAmt
Quantities of final products produced through completing the semi-manufactured products after receiving part 1 are cal-
culated in Eqs. (33)–(35).
CRZ mv tn P CSX mv tn 8v ; 8m; 8n; t P 2 ð33Þ
CRZ mv tn P CSRMmv tn 8v ; 8m; 8n; t P 2 ð34Þ

X
CRZ mv tn ¼ CRZW miv tn 8v ; 8m; 8n; t P 2 ð35Þ
i
Quantities of remaining products in distributor i after satisfying wholesalers’ demand is calculated in Eq. (36).
X X
INV iv tn ¼ ðCZ miv tn þ CRZW miv tn jtP2 Þ þ INV iv ;t1;n tP2 C iov tn 8v ; 8i; 8n; 8t ð36Þ
m o
As shown in Eq. (37), it is ensured that the quantity of products shipped from a manufacturer to distributors in each time
period is less than or equal to the total quantity of incoming products from other manufacturers within the same time period
and the remaining products from the previous time period.
X X
C iov tn 6 ðCZ miv tn þ CRZW miv tn jtP2 Þ þ INV iv ;t1;n tP2 8v ; 8i; 8n; 8t ð37Þ
o m
Table 4
Linearization methods which are employed to linearize the proposed model.
Nonlinear term Constraint Nonlinear term Linearization method

Maximum value term 2–4 Z ¼ MaxðX; YÞ Z P X; Z P Y
Z 6 Y; Z 6 X
Term of product of two binary variables (e.g., X and Y) 2–4, 12, 19, 22, and 32 Z ¼XY
Z PXþY 1
Term of product of two continuous variables (e.g., X and Y) 2–4 Z ¼XY Could not be linearized
It is stated that the demand of each wholesaler should be fulfilled through the stored and incoming products, as shown in
Eqs. (38) and (39). In case of a product shortage, the demand of wholesalers could not be satisfied, thus, the sales loss is
considered. Uncertainty of wholesalers’ demand is handled through the robust optimization part of the proposed model
and is formulated using the first and second supplementary variables for creating the robust counterpart of the product
demand uncertainty.
X X
C iov tn SCliov tn þ dov t þ PRO1ov tn þ cbud4ov t ZRO1ov tn 6 0 8o; 8v ; 8t; 8n ð38Þ
o o
PRO1ov tn þ ZRO1ov tn P d1sov t 8o; 8v ; 8t; 8n ð39Þ

The lower and upper limits of the transfer price of products shipped among facilities in different layers are enforced in
Eqs. (40) and (41). These limits are defined based on the ECOTA trade agreement and countries’ regulations.
ltpsmkment 6 TPSMkment 6 utpsmkment 8k; 8m; 8e; 8n; 8t ð40Þ
ltpmwmiv nt 6 TPMW miv nt 6 utpmwmiv nt 8m; 8i; 8v ; 8n; 8t ð41Þ

It should be noted that some of the non-linear equations of the proposed model is linearized using the techniques
presented in Table 4; however, Eqs. (2)–(4) could not be linearized.
Create an initial population of

randomely-generated solutions
Fitness function evaluation
Improve the best solution of the current generation

of GA via a TPALNS heuristic
In case of an improvement,
update the best known solution
Generate next population via:

1. Roullete wheel selection
2. Taguchi-based crossover/Mutation operators
3. Transfer a determined percent of the best solutions to the next generations
Fitness function evaluation

Yes
Improve the best solution of the current generation

of GA via a TPALNS heuristic
In case of an improvement,
update the best known solution
If the current
iteration number Iteration
≤ GA maximum number ++
iteration number
No
Stop
Fig. 2. The structure of the proposed memetic algorithm.

Main Fortified Fortified

Suppliers Manufacturers Distributors
suppliers suppliers manufacturers
s1 … ss s1 … ss a1 … aa l1 … ll s1 … ss a1 … aa
Periods
1 … 1 1 … 1 0 … 1 0 … 1 0 … 0 0 … 1
0 … 1 0 … 1 1 … 0 0 … 1 0 … 1 1 … 0
0 … 1 0 … 1 0 … 1 0 … 0 1 … 0 0 … 1
Fig. 3. The schematic overview of the proposed encoding representation.
5. Proposed solution algorithm: PTMA-TPALNS
Results of applying genetic algorithm (GA) to a wide variety of supply chain network design (SCND) problems have been
very promising among other evolutionary algorithms (Ko and Evans, 2007; Yeh, 2006; Pishvaee et al., 2010; Gen et al., 2006;
Wang and Hsu, 2010; Fahimnia et al., 2013; Shukla et al., 2013; Altiparmak et al., 2008). Despite the strengths of GA as a
combinatorial optimization algorithm, this algorithm has a limited efficiency in intensifying the local search process
(Altiparmak et al., 2008; Yeh, 2006; Eskandarpour et al., 2014a). Moscato and Norman (1992) address this challenge through
proposing the memetic algorithm (MA). Moscato and Norman (1992) proposed the memetic algorithm that applies a local
search procedure on the best solution obtained by each generation to intensify the search process and improve the quality of
the GA. Hasani et al. (2015) propose an efficient memetic algorithm based on the GA which incorporates adaptive VNS as a
local search heuristic for solving large-scale GSCND problems.
In this paper, the efficient MA proposed by Hasani et al. (2015) is improved by intensifying the procedure of its local
search and employing a parallel meta-heuristic algorithm. The structure of the proposed PTMA-TPALNS is shown in
Fig. 2. Our proposed algorithm is explained in detail through Sections 5.1–5.3. Various strategies for parallelization of solu-
tion algorithms, such as VNS and LNS, have been used in the literature (Crainic et al., 2004; Lopez et al., 2002). In this study,
the goals of parallelization are both to reduce the computational time and obtain better solutions. Interested readers are
referred to Altiparmak et al. (2008, 2006) for overviews on the genetic algorithm operators as well as its concepts, such
as chromosome, gene, multi-point cross over, and multi-point mutation.
5.1. Representation and evaluation of solution chromosomes
Each solution chromosome is represented through a two-dimensional binary array in the proposed MA. The size of the
proposed binary array is ðjsj þ jsj þ jaj þ jlj þ jsj þ jajÞ jtj. The value of each chromosome gene represents the state of each
related binary variable (see Fig. 3).
The fitness value of each chromosome is evaluated by calculating the value of the objective function in the proposed
model. The proposed MINLP problem is transformed into a nonlinear programming (NLP) problem with the solution-
decoding scheme using the obtained values of binary variables from chromosome decoding. Then the objective function
is calculated by solving an obtained NLP problem using non-linear optimization software, named LINDOGLOBAL in GAMS
24.1.2.
5.2. Initial and next population generation
The initial population is generated through a random process. In each iteration, the next population is created through:
(1) applying the next generation operators, and (2) transferring the pre-determined part of the best-obtained solutions in the
previous generation to the next one. The mating pool is filled with chromosomes that are selected through the roulette-
wheel selection adopted for applying the next generation operators (see Fig. 4).
Fig. 4. Flow diagram of the roulette-wheel selection procedure.

Fig. 5. Procedure of proposed Taguchi-based crossover operator.
A wide range of techniques have been proposed for applying the next generation of operators in the literature (Altiparmak
et al., 2006). In this paper, a Taguchi-based crossover and multi-point mutation operators are used, which are consistent with
the structure of the proposed chromosome. The procedure of the proposed Taguchi-based crossover operation is outlined in
Fig. 5 (Yang et al., 2013).
The value of the selected gene is inverted randomly (i.e., with a probability of 0.5) through the proposed mutation oper-
ator (i.e., 0 converts to 1 and 1 converts to 0). The binary constraints of the proposed problem, such as the reinforcement
budget limitation Eq. (11), should be observed when applying the mutation operator.
In order to quicken the search process, because of the resource consuming part in the proposed GA, an iteration-level
parallel model is applied. In the proposed GA, the population of individuals is decomposed and handled in parallel, and
the well-known master-worker (i.e., global parallelization) is used at the beginning of the parallelization. In this way, the
master performs the sequential selection and replacement operations. Then the associated workers (i.e., each CPU thread)
perform the recombination (i.e., crossover), mutation, and the evaluation of the objective function. The master sends the sub-
population to the workers, and the workers return back newly evaluated solutions to the master. Due to the order in which
the evaluation phase is performed in comparison with the other part of the proposed genetic algorithm, an asynchronous
model has been selected. As such, the worker does not have to wait for the return of all the evaluations to perform the selec-
tion, reproduction, and replacement steps. This means the recombination and the evaluation steps can be performed simul-
taneously. Interested readers are referred to Talbi (2009) for more information on meta-heuristics parallelization methods.
5.3. TPALNS algorithm: a fitness landscape analysis and parallelization approach
The ALNS heuristic is used to improve the best known solutions obtained from each iteration in the proposed MA. The
ALNS is based on the large neighborhood search heuristic (LNS) proposed by Shaw (1998). The ALNS uses a systematic selec-
tion in destroying and repairing neighborhood configurations based on their performances during the local search process. In
this paper, efficient destroy and repair neighborhood structures are proposed in accordance with the considered chromo-
some structures. The performance of each neighborhood structure is calculated based on its impact in the solution improve-
ment. The ALNS avoids getting stuck in a local optimum. This algorithm has a good performance in terms of both the solution
quality and computation time.
Fig. 6. The pseudo-code of the proposed TALNS heuristic for each CPU thread.
Destroy neighborhood structures
DNS1: Sets of different non-adjacent genes in a specific segment are randomly selected. Each set is a
sequence of genes with a random size. In addition, a number of selected sets is determined randomly.
DNS2: Set of adjacent genes in a specific segment is selected randomly. The Set size is determined randomly.
Repair neighborhood structures
RNS1: The selected set is located at its initial place with a new randomly-ordered for each sequence of genes.
RNS2: The selected set is located at its initial place with a new reversed-ordered for each sequence of genes.
RNS3: The selected set is shifted to a new random location with its initial order. Selection of the new location
depends on the number of sets that are selected. If number of sets is equal to 1, then the new location is
randomly selected in that segment. Otherwise, sets are shifted randomly to right or left only one or more units.
The shift direction is determined randomly with an equal probability of 0.5 for each direction. In addition, the
random shifting unit is equal for all of the selected sets.
Fig. 7. The repair and destroy neighborhood structures of the proposed TALNS.
A fitness landscape approach is adopted to determine the most effective order as well as improve the systematic
procedure of neighborhood selection in the proposed TPALNS (Pitzer and Affenzeller, 2012). The merit of the ALNS is in
its ability to intensify or diversify the search path through changing the existing neighborhood based on its performance.
In order to improve the effectiveness of this search strategy, selected neighborhood structures should be complementary
Fig. 8. Instances of considering the Tabu list concept in the local search process.
(Eskandarpour et al., 2014b; Talbi, 2009). For this reason, the neighborhood structures in the proposed ALNS should be
ordered such that the search scope of the neighborhood structures steadily increase (Talbi, 2009). Studying the landscape
of the research problem is one of the most effective approaches to determine such an order. The landscape analysis provides
an ability to study the inherent characteristics of the proposed problem instances, and integrate the gathered information in
the design of a proposed solution algorithm, i.e., TPALNS heuristic. Interested readers are referred to Talbi (2009) for over-
views of the landscape approaches. The normalized average distance is adopted for population, p, to analyze the landscape of
the proposed problem (see Eqs. (42) and (43)). Due to the binary representation in the proposed search space, the Hamming
distance (DMM) is used (see Eq. (44)) (Talbi, 2009). The smaller DMM values demonstrate more focused concentration of the
neighborhood structure (see Section 6.2). Steps in the employed TPALNS in the proposed MA for each CPU thread are demon-
strated in Fig. 6.
P P
s2P t2P;t–s distðs; tÞ
DMMðPÞ ¼ ð42Þ
jP j ðjPj 1Þ DIAMðPÞ
DIAMðPÞ ¼ Max distðs; tÞ ð43Þ

s;t2P
X
n
dist H ðx; yÞ ¼ xi yi ð44Þ
i¼1
Details of the proposed two destroy and four repair neighborhood structures, which are based on the considered two-
dimensional binary array chromosome, are outlined in Fig. 7.
In order to improve the search process in terms of the solution quality as well as time efficiency, a Tabu list is considered
in the proposed TPALNS algorithm. This list includes a pre-determined number of obtained solutions from previous itera-
tions. If a new solution, which is obtained from employing a selected neighborhood structure, does not belong to the Tabu
Table 5
The parameters of the proposed test problems based on the real-life characteristics.
Scope Parameter Instance

1 2 3 4 5 6 7 8 9 10 11 12
C1 CBudlit 100 80 60 40 20 0 100 80 60 40 20 0
CBud2it 100 80 60 40 20 0 100 80 60 40 20 0
CBud3it 100 80 60 40 20 0 100 80 60 40 20 0
CBud4mct 1 1 1 1 1 0 0 0 0 0 0 1
13 14 15 16 17 18 19 20 21 22 23 24
C1 & N1 CBudlit 100 80 60 40 20 0 100 80 60 40 20 0
CBud2it 100 80 60 40 20 0 100 80 60 40 20 0
CBud3it 100 80 60 40 20 0 100 80 60 40 20 0
CBud4mct 1 1 1 1 1 0 0 0 0 0 0 1
25 26 27 28 29 30 31 32 33 34 35 36
C1 & N1 & N2 CBudlit 100 80 60 40 20 0 100 80 60 40 20 0
CBud2it 100 80 60 40 20 0 100 80 60 40 20 0
CBud3it 100 80 60 40 20 0 100 80 60 40 20 0
CBud4mct 1 1 1 1 1 0 0 0 0 0 0 1
Table 6
Generation schemes of parameters of realistic case study.
Parameter Generation scheme and limit Parameter Generation scheme Parameter Generation scheme
and limit and limit
Planning periods number 10 Scenario number 5 Manufacturer 11–12
Supplier 17–20
Product number 5 CT2 [1.11, 1.33] CT1 [0.25, 0.4]
Part number 4 Af [1.9E+6, 2.9E+6] Aa [9.5E+6, 1.45E+7]
T1 1 Afy [1.9E+5, 2.9E+5] Aay [9.5E+5, 1.45E+5]
T2 1 Rf [0.285E+6, 0.435E+6] Ra [9.5E+5, 1.45E+5]
Vc 1 Exrs 50,872 Exrm 50,872
Supplier 1–10 C1 [9.5, 13.5] C2 [36.754, 55.131]
CT2 [500, 600] Tcap2 [3.2E+6, 4.8E+6] Tcap1 [8E+5, 1.2E6]
Af [1.0E+10, 1.5E+10] Manufacturer 1–8
Afy [1.0E+9, 1.5E+9] CT1 [300, 500]
Rf [0.15E+10, 0.225E+10] Aa [5.0E+10, 7.5E+10] Warehouse 1–18
Exrs 1 Aay [5.0E+9, 7.5E+9] Tcap3 [1.6E+6, 2.2E6]
C1 [1.2E+6, 2.1E+7] Ra [5.0E+9, 7.5E+9] H [5E+5, 7.5E+5]
Tcap2 [3.2E+6, 4.8E+6] Exrm 1 CT3 [600, 700]
Supplier 11–16 C2 [8E+5, 1.2E+6] Exrw 1
CT2 [0.44, 0.53] Tcap1 [8E+5, 1.2E6] Warehouse 19–30
Af [4.5E+6, 7.5E+6] Manufacturer 9–10 Tcap3 [1.6E+6, 2.2E6]
Afy [4.5E+5, 7.5E+5] CT1 [0.8, 1.2] H [2.3, 3.26]
Rf [0.675E+6, 1.125E+6] Aa [2.25E+7, 3.75E+7] CT3 [1.35, 1.55]
Exrs 21768 Aay [2.25E+6, 3.75E+6] Exrw 21768
C1 [4.5, 8, 5] Ra [2.25E+6, 3.75E+6] Warehouse 31–38
Tcap2 [3.2E+6, 4.8E+6] Exrm 21768 Tcap3 [1.6E+6, 2.2E6]
D (Wholesaler 1–30) [6.4E+6, 9.4E+6] C2 [15.726, 23.589] H [10, 15]
D (Wholesaler 31–36) [3.5E+6, 9.5E+6] Tcap1 [8E+5, 1.2E6] CT3 [1.47, 1.55]
D (Wholesaler 37–56) [4.2E+5, 1.2E+6] r 18% Exrw 50,872
list, it will be evaluate. If the solution belongs to the Tabu list, another new solution will be generated (see Fig. 8). The size of
the Tabu list is determined experimentally.
In the proposed TPALNS algorithm, thr CPU threads have been used to explore the solution space independently, using thr
TALNS algorithms. In addition, the central CPU has been used for the search coordination and control. The best solution of
each CPU thread is sent to the central CPU thread at the end of each iteration. Then the central CPU thread selects the best
solution among the thr solutions, and passes it to the thr CPU threads as an initial solution for next iteration. This procedure
continues until the stopping criteria is reached (i.e., reaching a predefined number of iterations). The details of TPALNS are as
follows:
Step 1: Define the destroy and repair neighborhood structures and determine the initial parameters, such as the number
of TALNS iterations at each CPU thread, the Tabu list size, the number of CPU threads (thr), and the number of hill
climbing iterations for local search. The best obtained solution of the last iteration of the proposed PTMA-PTALNS
should be considered before moving to the next step.
Step 2: While the number of iterations is less than the TALNS iteration limit for each CPU thread, repeat the following
procedures:
Table 7
The design and noise factors for parameter tuning using the Taguchi method.
Design factors Algorithms Levels Noise factors Levels

GA TMA- TMA- Level1 Level2 Level3 Level1 Level2 Level3
ALNS TALNS (Low) (Medium) (High) (Low) (Medium) (High)
GA number of iterations U U U 300 400 500 Suppliers 10 16 20
number
GA population size U U U 50 75 100 Manufacturers 8 10 12
number
Probability of applying mutation U U U 0.3 0.2 0.1 Warehouses 18 30 38
number
Tabu list size U 5 10 15
ALNS number of iterations U U 5 10 15
Percent of best solutions transferred U U U 0.05 0.1 0.15
from previous generation to the
next generation
Orthogonal array L9 (34 Þ L27 (35 Þ L27 (36 Þ
Table 8
The parameter values of the proposed MA-ALNS.
Parameter Value Parameter Value

GA number of iterations 500 GA population size 100
Tabu list size 10 ALNS number of iterations 10
Percent of best solutions transferred from previous generation to the next generation 0.1
Probability of applying mutation operator = 1 Probability of applying crossover operator 0.2
Interval Plot of Dmm

95% CI for the Mean
0.0225
0.0200
0.0175
Dmm
0.0150
0.0125
0.0100
1 2 3 4 1 2 3 4
NS NS NS NS NS NS NS NS
1-R 1-R 1-R 1-R 2-R 2-R 2-R 2-R
NS NS NS NS NS NS NS NS
D D D D D D D D
Neighborhood structure
Fig. 9. Interval plot of obtained DMM via applying different neighborhood structures.
Step 2a: Create neighborhood structures from the initial solution using TALNS at each CPU thread, compute the objective
function, send the solution to local search procedure, and update the best obtained solution list.
Step 2b: Send the best solution of each CPU thread to the central CPU thread at the end of iteration. Then select the best
solution from the central CPU thread as the initial solution of other CPU threads for the next iteration.
6. Computational experiments and results
The effectiveness of our proposed mathematical model and solution algorithm is investigated using a series of computa-
tional experiments designed using the real-life data of an electro-medical manufacturer company, referred to as XEM. For
this matter, 36 test problems, which describe real-world uncertainties, are considered based on experts’ opinions at XEM
(see Table 5). For the sake of data confidentiality, scaled limits of parameters are reported in Table 6. Both the proposed
hybrid algorithm and mathematical model are coded in C# and LINDOGLOBAL in GAMS 24.1.2, respectively, and run on a
PC with Core i5 2.67 GHz CPU and four GB of RAM. In this paper, the number of computational CPU threads has been deter-
mined to be four. Parameters of the proposed algorithm are determined by careful design of computational experiments
based on the off-line parameter initialization approach (Talbi, 2009). Therefore, a set of experiments is designed using the
statistical design of experiments method, named the Taguchi method (Byrne and Taguchi, 1987) (see Tables 7 and 8).
Table 9
Obtained results of DMM computation.
Neighborhood structure Maximize net after-tax profit

Average value Standard deviation
1 0.03603 0.001081
2 0.03847 0.001539
3 0.01577 0.005362
4 0.01884 0.00113
5 0.05606 0.010651
6 0.05231 0.011508
7 0.03257 0.00456
8 0.07033 0.002813
6.1. Experimental results of landscape analysis in the proposed TALNS
To determine an effective order list and improve the systematic procedure of neighborhood structures, a landscape anal-
ysis approach discussed in Section 5.3 is used. First, DMM is calculated for each neighborhood structure by applying the Hill
Climbing algorithm, which incorporates neighborhood structures to improve the population. For this matter, the proposed
test problems discussed in Section 6 are used 10 times with an initial similar population size of 100. Obtained results of the
DMM computations are outlined in Fig. 9.
These results indicate that all of the applied neighborhood structures have a significant, positive impact on concentrating
examined populations. Neighborhood structures with a smaller DMM value have a more focused concentration; however,
there is a conflict between selection orders of some neighborhood structures, including DNS2-RNS3, DNS1-RNS2, DNS2-
RNS2, DNS2-RNS4, and DNS2-RNS1 (see Fig. 9). To tackle this problem, these neighborhood structures are selected using
a systematic selection procedure. This systematic procedure is based on the performance of the neighborhood structure dur-
ing the local search process, after the sequential selection of the neighborhood structures, and without tightening in each
iteration of the proposed TALNS. The obtained results indicate the time efficiency and performance superiority of the pro-
posed TALNS by applying the fitness landscape analysis (see Table 9).
6.2. Efficiency evaluation of the proposed PTMA-TPALNS
In this section, the quality of the best obtained solutions from our proposed PTMA-TPALNS is compared with solutions
obtained via LINDOGLOBAL and two other metaheuristics: (1) the GA, and (2) the MA based on the Taguchi-based GA
and general ALNS, named TMA-ALNS. For a better demonstration of the parallelization benefit, results of the generic TMA
and TALNS are compared with the results of the proposed parallel algorithms (i.e., PTMA and TPALNS). Furthermore, to eval-
uate the effectiveness of the proposed metaheuristic search, the quality of the obtained solutions has been compared with
the upper bound found by Lagrangian relaxation heuristic. The maximum allowed CPU time for LINDOGLOBAL was limited to
96 h. For each metaheuristic, the best known solution, F Best , the worst solution, F Min , the standard deviation of obtained solu-
tions, St.D., the gap from the best known solution found by all the methods, and the average CPU time, CT Av g , are reported
based on running each of the methods for 10 iterations. The corresponding gap is calculated based on the best found solution
using all the considered methods and the solution found by each algorithm using Eq. (45) as follows:
F BKS F Alg
Gap ¼ 100 ð45Þ
F BKS
F Alg and F BKS denote the objective function values of the best-known solutions found by each algorithm and all the considered
algorithms, respectively.
In Tables 10 and 11, the results of assessing the efficiency of the proposed PTMA-TPALNS against other considered meth-
ods in this study are shown.
The computational results indicate that all the considered methods can solve smaller domestic instances (for instance,
when their scope is restricted to the main country and not its neighbors) (see Table 10); however, the performances of
the proposed algorithms are better than LINDOGLOBAL for larger instances. In particular, LINDOGLOBAL, GA, and TMA-
ALNS have average gaps of 17.58%, 13.12%, and 4.62%, respectively, while TMA-TALNS has outperformed all these aforemen-
tioned methods. LINDOGLOBAL is not able to prove the optimality of its best-found solutions for most instances, even after
96 h. To confirm the statistical significance of the TMA-TALNS, a non-parametric statistical test, called the Mann–Whitney
U-test (Freund, 2003), is conducted on large instances (i.e., instances 25–36). The statistical significance of the TMA-
TALNS is checked based on the superior performance in terms of the quality of the best-known solution (i.e., objective value).
Results show that for all possible comparisons, the U-value is zero. Since the critical value of U at p 6 0:05 is 54 (based on the
number of observations), all results are significant at p 6 0:05. This confirms the superiority of TMA-TALNS against
LINDOGLOBAL, GA, and TMA-ALNS.
In addition, TMA-TALNS is fairly robust in terms of the difference between its best-case and worst-case performances.
According to Tables 10 and 11, the worst-case performance (based on the F min Þ of TMA-TALNS has an average gap of
2.54% with the best-case performance (based on the F max Þ. The worst-case performance of TMA-TALNS is still, on average,
6.94% better than the best-case performance of the GA. Finally, the results demonstrate using a local search mechanism
enhances the effectiveness of the GA. Using the proposed systematic adaptive approach to select neighborhoods in the local
search phase enhances the MA performance in terms of the quality.
While GA has the best CPU time from start to the termination of the search process with an average of 30.84 h versus
36.12 and 33.94 h for TMA-ALNS and TMA-TALNS, respectively, the quality of the solutions found using GA is worse than
those found using TMA-ALNS and TMA-TALNS. The applied TALNS heuristic in TMA-TALNS spends less time in the local
search phase, allowing less computational effort and as a result, smaller CPU times in comparison to the ALNS heuristic
for TMA-ALNS. Additionally, better use of neighborhood structures, results in better best-known solutions from the TALNS
heuristic than the ALNS heuristic.
Table 10
Results of investigating the efficiency of TMA-TALNS for small and medium-sized instances.
Instance Scope Best known LINDOGLOBAL GA TMA-ALNS TMA-TALNS

solution
(billion IRRs)
F Best Gap CT Av g F Best F Min Std Gap CT Av g F Best F Min Std Gap CT Av g F Best F Min Std Gap CT Av g
(%) (h) (%) (h) (%) (h) (%) (h)
1 C1 1059.43 1059.43a 0 21.04 1059.43 1040.68 11.95 0 18.86 1059.43 1031.88 11.09 0 22.98 1059.43 1034.22 13.45 0 22

2 1113.46 1113.46a 0 23.71 1113.46 1093.64 12.93 0 18.74 1113.46 1070.15 12.73 0 25.34 1113.46 1097.09 10.36 0 22.64
3 1154.32 1154.32a 0 23.82 1154.32 1127.20 13.26 0 19.21 1154.32 1137.01 16.11 0 22.19 1154.32 1119.23 16.03 0 20.17
4 1213.19 1213.20a 0 23.99 1213.20 1165.15 14.53 0 19.1 1213.20 1166.85 11.96 0 22.18 1213.20 1174.62 14.77 0 20.03
5 1274.58 1274.58a 0 24.01 1274.58 1240.17 15.93 0 18.77 1274.58 1255.72 13.75 0 23.92 1274.58 1226.40 9.83 0 21.21
6 1319.44 1319.45a 0 24.7 1319.45 1276.70 13.73 0 19.16 1319.45 1292.80 11.21 0 25.02 1319.45 1287.39 15.94 0 21.33
7 1136.85 1136.85a 0 23.06 1136.85 1116.39 10.73 0 20.58 1136.85 1117.64 16.37 0 25.73 1136.85 1118.32 10.27 0 21.33
8 1181.33 1181.34a 0 23.31 1181.34 1140.46 9.90 0 20.03 1181.34 1145.42 16.43 0 22.96 1181.34 1157.12 15.11 0 22.39
9 1252.13 1252.14a 0 23.49 1252.14 1213.70 15.77 0 19.14 1252.14 1219.46 11.57 0 22.2 1252.14 1230.23 11.81 0 20.79
10 1323.78 1323.78a 0 21.64 1323.78 1291.61 16.39 0 18.87 1323.78 1298.76 9.99 0 25.22 1323.78 1276.13 12.92 0 19.88
11 1374.99 1375.00a 0 22.64 1375.00 1321.65 15.20 0 18.84 1375.00 1344.88 12.20 0 22.83 1375.00 1347.91 16.54 0 22.61
12 1294.37 1294.38a 0 24.57 1294.38 1266.42 13.10 0 19.41 1294.38 1272.63 9.79 0 24.83 1294.38 1265.38 14.75 0 22.63
Average 0.00 23.33 0.00 19.23 0.00 23.78 0.00 21.42
b
13 C1 & 1703.55 1505.51 13.15 96 1564.15 1510.82 13.04 8.91 33.1 1635.73 1588.78 10.00 4.15 34.32 1703.55 1687.02 12.92 0 34.02
N1
14 1805.73 1595.37b 13.19 96 1640.64 1602.08 17.48 10.06 30.12 1720.84 1668.52 12.31 4.93 34.5 1805.73 1772.94 15.82 0 35.92
15 1838.43 1632.94b 12.58 96 1697.45 1648.73 10.36 8.31 31.6 1785.74 1750.02 12.24 2.95 39.16 1838.43 1801.62 14.96 0 32.55
16 1963.87 1748.25b 12.33 96 1780.45 1729.88 10.44 10.30 29.58 1878.65 1830.93 10.26 4.54 35.19 1963.87 1918.88 16.24 0 35.57
17 2096.59 1802.33b 16.33 96 1866.80 1836.18 16.23 12.31 28.98 1975.64 1914.40 12.92 6.12 34.99 2096.59 2031.71 15.05 0 31.99
18 2187.58 1897.37b 15.30 96 1928.64 1861.91 17.84 9.07 29.98 2047.19 1994.99 10.01 2.75 33.57 2187.58 2121.58 16.90 0 31.82
19 1812.69 1572.30b 15.29 96 1658.42 1619.45 11.39 9.30 32.75 1765.62 1723.59 17.51 2.67 37.28 1812.69 1785.57 17.17 0 34.19
20 1963.62 1681.53b 16.78 96 1719.86 1693.72 16.01 14.17 31.36 1836.50 1789.30 10.80 6.92 34.66 1963.62 1912.39 9.75 0 31.65
21 2072.75 1764.71b 17.46 96 1819.30 1785.10 13.38 13.93 32.7 1948.47 1891.38 16.53 6.38 34.09 2072.75 2013.07 11.39 0 35.76
22 2134.14 1884.57b 13.24 96 1919.55 1871.17 14.53 11.18 30.46 2061.98 1999.50 14.40 3.50 37.03 2134.14 2079.40 14.95 0 35.57
23 2361.30 1901.63b 24.17 96 1989.82 1960.17 14.19 18.67 28.99 2143.85 2099.47 15.76 10.14 35.92 2361.30 2296.20 16.29 0 32.91
24 2128.59 1898.32b 12.13 96 1969.41 1822.11 15.69 7.04 31.56 2108.13 1956.90 16.00 0.00 37.52 2128.59 2076.54 11.13 0 35.62
Average 15.16 96 11.11 30.93 4.59 35.69 0.00 33.96
The bold values denote which method has found the best solution.
a
Proven optimal solution by LINDOGLOBAL.
b
The best solution found by LINDOGLOBAL after 96 h which is not to be proven optimal.
39
40
Table 11
Results of investigating the efficiency of TMA-TALNS for large-sized instances.

Instance Scope Best known LINDOGLOBAL GA TMA-ALNS TMA-TALNS
solution
(billion
IRRs)
F Best Gap CT Av g F Best F Min Std Gap CT Av g F Best F Min Std Gap CT Av g F Best F Min Std Gap CT Av g
(%) (h) (%) (h) (%) (h) (%) (h)
25 C1 & 2536.47 2106.33b 20.42 96 2260.80 2161.33 14.23 12.19 43.58 2466.99 2327.11 16.20 2.82 52.9524 2536.47 2425.02 12.95 0 50.53
N1 &
N2
26 2704.28 2226.88b 21.44 96 2376.10 2151.80 17.23 13.81 41.05 2605.77 2516.65 14.54 3.78 50.3388 2704.28 2632.37 19.21 0 47.96
27 2842.18 2353.28b 20.78 96 2463.30 2249.49 23.02 15.38 41.64 2714.90 2516.99 12.74 4.69 50.22 2842.18 2767.71 22.88 0 48.03
28 3029.45 2517.23b 20.35 96 2588.93 2473.98 22.41 17.02 44.21 2867.63 2607.82 16.15 5.64 46.2024 3029.45 2948.25 18.53 0 45.01
29 3227.37 2653.25b 21.64 96 2719.93 2597.54 11.84 18.66 44.39 3027.80 2814.94 19.96 6.59 46.764 3227.37 3180.96 17.61 0 45.31
30 3385.94 2823.28b 19.93 96 2815.67 2629.28 19.09 20.25 38.4 3150.05 2902.77 17.99 7.49 49.2804 3385.94 3320.71 17.43 0 46.64
31 2839.68 2254.67b 25.95 96 2426.02 2251.11 19.41 17.05 44.7 2727.69 2591.86 22.49 4.11 48.5568 2839.68 2782.91 15.23 0 45.22
32 2996.63 2478.99b 20.88 96 2520.95 2397.17 11.59 18.87 41.72 2848.59 2699.90 16.87 5.20 51.5376 2996.63 2878.25 21.86 0 48.08
33 3129.00 2528.82b 23.73 96 2672.04 2479.92 22.13 17.10 40.65 3034.42 2886.34 12.95 3.12 43.6536 3129.00 3025.91 17.65 0 41.78
34 3368.82 2614.40b 28.86 96 2824.92 2718.42 16.22 19.25 39.47 3224.08 3015.80 22.16 4.49 45.5004 3368.82 3293.04 13.12 0 43.88
35 3556.62 2798.95b 27.07 96 2934.21 2807.46 18.60 21.21 44.7 3365.56 3120.88 13.74 5.68 49.7448 3556.62 3481.99 22.20 0 45.03
36 3274.20 2769.64b 18.22 96 2762.18 2669.64 12.00 18.54 44.04 3184.07 3049.06 19.57 2.83 52.0128 3274.20 3193.81 17.86 0 49.8
Average 22.44 96 17.44 42.38 4.70 48.90 0.00 46.44
The bold values denote which method has found the best solution.
a
b
The best solution found by LINDOGLOBAL after 96 h which is not to be proven optimal.
Table 12
Comparison of the proposed GA and TMA-TALNS for a fixed CPU time for small and medium-sized instances.
Instance Scope Best known CT (h)a GA TMA-TALNSFixedTime TMA-

solution TALNSFinal/FixedTime
(billion IRRs)
F Best F Min Std Gap (%) F Best F Min Std Gap (%) FI (%) CT diff (h)
b
1 C1 1059.43 18.86 1059.43 1040.68 11.95 0 1030.08 997.60 11.87 2.85 2.85 3.14
2 1113.46 18.74 1113.46b 1093.64 12.93 0 1071.48 1036.31 8.64 3.92 3.92 3.9
3 1154.32 19.21 1154.32b 1127.2 13.26 0 1132.74 1079.61 12.84 1.91 1.91 0.96
4 1213.2 19.1 1213.20b 1165.15 14.53 0 1177.16 1128.81 13.26 3.06 3.06 0.93
5 1274.58 18.77 1274.58b 1240.17 15.93 0 1239.28 1182.99 8.34 2.85 2.85 2.44
6 1319.45 19.16 1319.45b 1276.7 13.73 0 1256.25 1210.27 13.79 5.03 5.03 2.17
7 1136.85 20.58 1136.85b 1116.39 10.73 0 1105.36 1078.74 8.41 2.85 2.85 0.75
8 1181.34 20.03 1181.34b 1140.46 9.9 0 1160.43 1104.59 12.55 1.80 1.80 2.36
9 1252.14 19.14 1252.14b 1213.7 15.77 0 1191.79 1147.43 9.43 5.06 5.06 1.65
10 1323.78 18.87 1323.78b 1291.61 16.39 0 1286.05 1230.95 10.47 2.93 2.93 1.01
11 1375 18.84 1375.00b 1321.65 15.2 0 1336.91 1300.19 13.43 2.85 2.85 3.77
12 1294.38 19.41 1294.38b 1266.42 13.1 0 1255.55 1220.59 12.13 3.09 3.09 3.22
13 C1 & N1 1652.44 33.10 1564.15 1510.82 13.04 5.64 1652.44 1639.77 10.62 0.00 3.09 0.92
14 1753.54 30.12 1640.64 1602.08 17.48 6.88 1753.54 1741.04 12.69 0.00 2.98 5.80
15 1805.52 31.60 1697.45 1648.73 10.36 6.37 1805.52 1839.18 12.31 0.00 1.82 0.95
16 1925.18 29.58 1780.45 1729.88 10.44 8.13 1925.18 1959.52 13.20 0.00 2.01 5.99
17 2033.69 28.98 1866.80 1836.18 16.23 8.94 2033.69 2044.67 12.37 0.00 3.09 3.01
18 2123.05 29.98 1928.64 1861.91 17.84 10.08 2123.05 2186.55 13.75 0.00 3.04 1.84
19 1776.62 32.75 1658.42 1619.45 11.39 7.13 1776.62 1873.73 14.90 0.00 2.03 1.44
20 1904.72 31.36 1719.86 1693.72 16.01 10.75 1904.72 1999.34 8.10 0.00 3.09 0.29
21 2013.47 32.70 1819.30 1785.10 13.38 10.67 2013.47 2128.94 9.36 0.00 2.94 3.06
22 2093.38 30.46 1919.55 1871.17 14.53 9.06 2093.38 2294.20 12.57 0.00 1.95 5.11
23 2300.85 28.99 1989.82 1960.17 14.19 15.63 2300.85 2405.90 13.73 0.00 2.63 3.92
24 2064.73 31.56 1969.41 1822.11 15.69 4.84 2064.73 2327.14 9.15 0.00 3.09 4.06
IR average 0.00 3.18 3.18 2.19
IR & AZ average 8.68 0.00 3.09 4.06

a
Average CPU time used by the GA.
b
Table 13
Comparison of the proposed GA and TMA-TALNS for a fixed CPU time for large-sized instances.
Instance Scope Best known CT (h)a GA TMA-TALNSFixedTime TMA-

solution TALNSFinal/FixedTime
(billion IRRs)
F Best F Min Std Gap (%) F Best F Min Std Gap (%) FI (%) CT diff (h)
25 C1 & N1 2409.64 43.58 2260.80 2161.33 14.23 6.58 2409.64 2159.73 10.64 0.00 5.26 6.95
& N2
26 2601.78 41.05 2376.10 2151.80 17.23 9.50 2601.78 2320.70 15.66 0.00 3.94 6.91
27 2717.69 41.64 2463.30 2249.49 23.02 10.33 2717.69 2497.30 18.35 0.00 4.58 6.39
28 2879.49 44.21 2588.93 2473.98 22.41 11.22 2879.49 2689.10 15.03 0.00 5.21 0.80
29 3008.23 44.39 2719.93 2597.54 11.84 10.60 3008.23 2864.77 14.47 0.00 7.28 0.92
30 3187.19 38.40 2815.67 2629.28 19.09 13.19 3187.19 3045.09 14.33 0.00 6.24 8.24
31 2622.45 44.70 2426.02 2251.11 19.41 8.10 2622.45 2607.00 12.52 0.00 8.28 0.52
32 2786.87 41.72 2520.95 2397.17 11.59 10.55 2786.87 2563.37 17.97 0.00 7.53 6.36
33 2909.34 40.65 2672.04 2479.92 22.13 8.88 2909.34 2816.88 14.51 0.00 7.55 1.13
34 3167.36 39.47 2824.92 2718.42 16.22 12.12 3167.36 3093.56 10.78 0.00 6.36 4.41
35 3307.66 44.70 2934.21 2807.46 18.60 12.73 3307.66 3301.44 18.25 0.00 7.53 0.33
36 3089.86 44.04 2762.18 2669.64 12.00 11.86 3089.86 3053.98 14.68 0.00 5.97 5.76
IR & TR & AZ average 10.47 0.00 6.31 4.06
a
Average CPU time used by the GA.
It must be noted that the long CPU times of all the considered methods are in part due to the computational time required
to solve the NLP sub problems as described in Section 5.1. Considering the required investment for designing global supply
chains and the lengthy process of the SC design, however, the computational time of our proposed method is acceptable.
Considering the significant difference in the CPU time between GAas the fastest and TMA-TALNS as the best regarding the
solution quality, TMA-TALNS is compared with GA for a fixed CPU time to make a fair comparison between them. In this
Table 14
Evaluation of the proposed parallelization on the performance of the proposed PTMA-TPALNS.
Instance Scope Best known solution TMA-TALNS PTMA-TPALNS

(billion IRRs)
F Best F Min Std Gap CT Av g F Best F Min Std Gap CT Av g
(%) (h) (%) (h)
1 C1 1059.43 1059.43 1034.22 13.45 0 22 1059.43 1034.22 11.23 0 6.05
2 1113.46 1113.46 1097.09 10.36 0 22.64 1113.46 1097.09 9.72 0 6.22
3 1154.32 1154.32 1119.23 16.03 0 20.17 1154.32 1119.23 17.14 0 5.54
4 1213.19 1213.20 1174.62 14.77 0 20.03 1213.20 1174.62 15.28 0 5.50
5 1274.58 1274.58 1226.40 9.83 0 21.21 1274.58 1226.40 10.01 0 5.83
6 1319.44 1319.45 1287.39 15.94 0 21.33 1319.45 1287.39 14.94 0 5.83
7 1136.85 1136.85 1118.32 10.27 0 21.33 1136.85 1118.32 10.27 0 5.86
8 1181.33 1181.34 1157.12 15.11 0 22.39 1181.34 1157.12 14.42 0 6.14
9 1252.13 1252.14 1230.23 11.81 0 20.79 1252.14 1230.23 10.29 0 5.70
10 1323.78 1323.78 1276.13 12.92 0 19.88 1323.78 1276.13 10.18 0 5.46
11 1374.99 1375.00 1347.91 16.54 0 22.61 1375.00 1347.91 17.13 0 6.21
12 1294.37 1294.38 1265.38 14.75 0 22.63 1294.38 1265.38 14.64 0 6.28
Average 0.00 21.42 0.00 5.88
13 C1 & N1 1703.55 1703.55 1687.02 12.92 0.44 34.02 1711.046 1687.02 12.82 0 9.35
14 1805.73 1805.73 1772.94 15.82 1.90 35.92 1840.039 1772.94 17.86 0 9.87
15 1838.43 1838.43 1801.62 14.96 0.30 32.55 1843.945 1801.62 16.35 0 8.94
16 1963.87 1963.87 1918.88 16.24 1.68 35.57 1996.863 1918.88 15.89 0 9.77
17 2096.59 2096.59 2031.71 15.05 1.20 31.99 2121.749 2031.71 17.39 0 8.78
18 2187.58 2187.58 2121.58 16.90 1.59 31.82 2222.363 2121.58 17.20 0 8.74
19 1812.69 1812.69 1785.57 17.17 0.46 34.19 1821.028 1785.57 17.94 0 9.39
20 1963.62 1963.62 1912.39 9.75 0.83 31.65 1979.918 1912.39 9.06 0 8.70
21 2072.75 2072.75 2013.07 11.39 1.47 35.76 2103.219 2013.07 12.11 0 9.83
22 2134.14 2134.14 2079.40 14.95 1.49 35.57 2165.939 2079.40 16.16 0 9.77
23 2361.30 2361.30 2296.20 16.29 1.59 32.91 2398.845 2296.20 15.67 0 9.04
24 2128.59 2128.59 2076.54 11.13 1.61 35.62 2162.860 2076.54 11.63 0 9.79
Average 1.21 33.96 0.00 9.33
25 C1 & N1 & 2536.47 2536.47 2425.02 12.95 3.79 50.53 2632.602 2425.02 12.56 0 14.52
N2
26 2704.28 2704.28 2632.37 19.21 3.57 47.96 2800.823 2632.37 17.67 0 13.78
27 2842.18 2842.18 2767.71 22.88 2.37 48.03 2909.54 2767.71 27.25 0 13.80
28 3029.45 3029.45 2948.25 18.53 2.83 45.01 3115.183 2948.25 18.04 0 12.94
29 3227.37 3227.37 3180.96 17.61 2.45 45.31 3306.441 3180.96 19.89 0 13.02
30 3385.94 3385.94 3320.71 17.43 2.65 46.64 3475.667 3320.71 19.36 0 13.40
31 2839.68 2839.68 2782.91 15.23 3.73 45.22 2945.6 2782.91 15.80 0 13.05
32 2996.63 2996.63 2878.25 21.86 2.34 48.08 3066.751 2878.25 21.33 0 13.82
33 3129.00 3129.00 3025.91 17.65 3.00 41.78 3222.87 3025.91 20.75 0 12.01
34 3368.82 3368.82 3293.04 13.12 2.58 43.88 3455.736 3293.04 12.54 0 12.61
35 3556.62 3556.62 3481.99 22.20 2.52 45.03 3646.247 3481.99 25.33 0 12.94
36 3274.20 3274.20 3193.81 17.86 2.34 49.8 3350.816 3193.81 20.30 0 14.31
Average 2.84 46.44 0.00 13.35
comparison, the fixed CPU time is the same as the CPU time required by GA to solve the problem. In other words, TMA-TALNS
is stopped as soon as the GA terminates, and its best-found solution so far would be reported. According to Tables 12 and 13,
GA outperforms TMA-TALNS for instances 1–12 with an average gap of 3.18%; however, for larger instances, TMA-TALNS out-
performs GA significantly with an average gap of 9.57%. GA and TMA-TALNS have total average gaps of 6.38% and 1.06%. This
confirms the better performance of our proposed TMA-TALNS for a fixed CPU time. Considering Tables 12 and 13, the com-
plete version of the TMA-TALNS (i.e., no termination in the search process) compared to its fixed-time version (i.e., termi-
nation in the search process) results in better solutions with an average gap of 4.05% (see column FI in Tables 12 and 13)
and time difference of 3.09 h (see column CT diff in Tables 12 and 13). FI is an average gap between the obtained best-
known solutions of the terminated TMA-TALNS (i.e., with the fixed CPU time) and non-terminated (i.e., run the algorithm
to the end) TMA-TALNS. In addition, CT diff is an average time to the end of TMA-TALNS after stopping it in the middle of
the search process. Considering the strategic nature of the problem and the huge amount of investment in designing GSC
networks, this additional required CPU time is acceptable.
As mentioned earlier, to explore more parts of the solution space as well as reduce central processing unit time, paral-
lelization technique has been applied in the proposed solution algorithm. The main reasons for the considerable perfor-
mance of the PTMA-TPALNS could be attributed to changing neighborhood structures at the inner and outer loops, as
well as the parallelization of the algorithm, which lead to finding additional and better solutions. As mentioned earlier, par-
allelization has a significant effect on diversification and the exploration of more areas of the solution space. To examine
Fig. 10. The proposed Lagrangian relaxation heuristic algorithm.
Step 0:
Calculate the values of slack variables corresponding to the relaxed constraints after
solving Lagrangian problem in each iteration.
For all of the calculated slack variables repeat steps 1
Step 1:
If the considered slack variable is greater or equal than zero then
Identify the binary variables corresponding to the relaxed constraint which are
equals to 0 and fix them in the initial optimization model (1)-(41)
Step 2:
Solve the initial optimization model resulted from step (1) to obtain new lower-
bound (LB)
If (new LB>old LB) then
Step 3:
LB for the next iteration in the subgradient algorithm = new LB
Fig. 11. The proposed lower bound heuristic algorithm.
this issue, performances of TMA-TALNS and PTMA-TPALNS are compared with each other (see Table 14). The iteration num-
ber of TALNS is set r 1 times of the iteration number of TPALNS for each processor. It could be concluded from Table 14 that
PTMA-TPALNS is also superior to TMA-TALNS in terms of both the solution quality and CPU time (on average, 1.35% as well
as 72.01%, respectively). Therefore, these results confirm the significant positive effect of parallelization on the proposed
method.
Finally, quality of obtained solutions by the proposed PTMA-TPALNS is evaluated by comparing their distance from the
upper bound, which is found by the Lagrangian relaxation heuristic. In the proposed Lagrangian relaxation heuristic, some
of the complicating equations are relaxed in the proposed GSCND model and the considered problem is decomposed into
relatively easy subproblems. The success of the Lagrangian relaxation approach depends greatly on the ability to generate
good Lagrangian multipliers (Badri and Afghahi, 2010; Melo et al., 2009). Generally, the computation of a good set of mul-
tipliers is difficult (Everett, 1963; Poljack, 1967). In the classical subgradient approach, the lower bound (LB) is considered as
a fixed amount; hence the classical approach cannot guaranty to obtain a feasible converted solution (Badri et al., 2013;
Bajgiran et al., 2014). In order to guarantee the feasibility of the converged solution in the sub-gradient method, we propose
a heuristic to update the LB in each iteration. More precisely, we propose to improve the quality of the LB based on the most
recent upper-bound (UB) obtained at each iteration of the subgradient. The reason is that the quality of the UB is expected to
be improved as we proceed in the subgradient algorithm. In order to update the LB, after each iteration, the slack variables
corresponding to the relaxed Eqs. (11), (14), (17), (21), and (24)–(27) are computed. If the slack is positive, it means its
related constraint is satisfied; hence we suggest finding those variables in these equations that already have taken value
zero, then fixing them in the initial model (1)–(41). From there, solving the revised model (1)–(41), a new feasible solution
(i.e., the LB) can be obtained. The proposed Lagrangian relaxation heuristic is presented in Fig. 10. The stopping criteria in the
proposed Lagrangian relaxation heuristic algorithm is considered to be the number of iterations without improvement in the
Table 15
Evaluation performance of the proposed PTMA-TPALNS compared with the Lagrangian heuristic bounds.
Instance Scope PTMA-TPALNS Lagrangian Heuristic (LR)

F Best F Min Gap (%) = (UB F BestÞ )/UB LB UB LR Gap (%) = (UB LB)/LB
1 C1 1059.43 1034.22 4.562 1015.51 1107.76 9.084
2 1113.46 1097.09 5.521 1078.35 1174.93 8.957
3 1154.32 1119.23 5.561 1114.61 1218.51 9.322
4 1213.20 1174.62 5.33 1165.67 1277.86 9.625
5 1274.58 1226.40 4.768 1229.46 1335.35 8.613
6 1319.45 1287.39 6.04 1265.66 1399.14 10.547
7 1136.85 1118.32 4.399 1094.21 1186.86 8.467
8 1181.34 1157.12 5.679 1150.44 1248.43 8.517
9 1252.14 1230.23 4.616 1181.52 1309.94 10.869
10 1323.78 1276.13 5.683 1263.69 1399.01 10.708
11 1375.00 1347.91 4.32 1327.40 1434.40 8.061
12 1294.38 1265.38 5.986 1242.25 1371.86 10.434
5.205 9.43
13 C1&N1 1711.046 1687.02 5.549 1612.88 1805.99 11.973
14 1840.039 1772.94 6.972 1770.94 1968.33 11.146
15 1843.945 1801.62 5.583 1729.74 1946.89 12.554
16 1996.863 1918.88 6.22 1878.66 2121.07 12.903
17 2121.749 2031.71 5.333 1982.88 2234.90 12.71
18 2222.363 2121.58 5.661 2095.31 2348.17 12.068
19 1821.028 1785.57 5.467 1699.35 1920.58 13.019
20 1979.918 1912.39 7.031 1887.34 2119.13 12.281
21 2103.219 2013.07 5.299 1981.04 2214.67 11.793
22 2165.939 2079.40 5.758 2060.77 2290.65 11.155
23 2398.845 2296.20 5.232 2259.56 2524.35 11.719
24 2162.860 2076.54 6.474 2027.22 2302.88 13.598
5.882 12.24
25 C1&N1&N2 2632.602 2425.02 7.164 2484.79 2821.20 13.539
26 2800.823 2632.37 6.651 2607.05 2987.11 14.578
27 2909.54 2767.71 8.056 2744.98 3143.93 14.534
28 3115.183 2948.25 7.255 2918.91 3341.19 14.467
29 3306.441 3180.96 7.722 3108.30 3561.76 14.589
30 3475.667 3320.71 7.377 3224.36 3732.07 15.746
31 2945.6 2782.91 8.046 2738.41 3182.60 16.221
32 3066.751 2878.25 6.624 2849.63 3269.89 14.748
33 3222.87 3025.91 7.072 3054.15 3450.79 12.987
34 3455.736 3293.04 8.143 3256.00 3737.14 14.777
35 3646.247 3481.99 7.298 3459.26 3912.35 13.098
36 3350.816 3193.81 7.948 3139.06 3617.14 15.23
7.446 14.54
Table 16
Impact of considering the correlation between disruptions on supply chain performance measures.
Performance measure
Total net profit after tax Inventory cost
Via considering the correlation between disruption occurrence 2536.47 2024.12
Without considering the correlation between disruption occurrence 1735.92 1428.61
Table 17
Impact of the applying strategies to deal with disruption on supply chain performance measures.
Scenario Without applying strategies to deal Applying strategies to deal with

with disruptions disruptions
Total net profit Inventory cost Total net profit Inventory cost
No disruption occurrence 3837.49 2731.94 3162.40 2875.95
Disruption occurrence in all of the considered regions 2449.08 2058.78 2738.40 3299.44
Disruption occurrence in some specific regions 3210.82 2434.70 3106.78 3242.90
obtained gap of the found solution. The number of iterations is set experimentally at 300. The heuristic algorithm for updat-
ing the lower bound in the proposed Lagrangian relaxation algorithm is presented in Fig. 11; however, the proposed LR
heuristic could not find tight upper bounds due to the high complexity of the proposed GSCND model as a MINLP.
Normal Plot of the Effects

(response is Net profit after tax, Alpha = 0.05)
99
Effect Type
95 A
Not Significant
Significant
90 B
80 D Factor Name
70 A Facility fortification
B Multiple sourcing
Percent
60
50 C Semi-manufactured production
40 D Facility dispersion
30
E Keeping inventory
20
F Alternative BOM adaption
10
5
1
-20 -10 0 10 20 30 40 50 60
Effect
Lenth's PSE = 4.73238
Fig. 12. Normal plot of the effects of proposed resilience strategies to deal with disruptions.
Main Effects Plot for Net profit after tax

Data Means
Facility fortification Multiple sourcing Semi-manufactured production
100
80
60
40
Mean
-1 1 -1 1 -1 1
Facility dispersion Keeping inventory Alternative BOM adaption
100
80
60
40
-1 1 -1 1 -1 1
Fig. 13. Main effects plot of proposed resilience strategies for the net after-tax profit.
The obtained gaps between the best found solution of the PTMA-TPALNS and upper bound of LR heuristic indicate the rel-
atively acceptable performance of the proposed metaheuristic solution algorithm in terms of solution quality (Table 15). As
indicated in Table 15, the results demonstrate the average of gap 7.44% for large-sized instances.
7. Experimental results and managerial insights
In this section, the efficiency of the proposed model when dealing with correlated disruptions and uncertainties in
designing an efficient supply chain networks within global business environments is investigated, and managerial insights
are presented based on extensive statistical analysis and numerical experimentation.
The six resilience strategies have been applied for XEM’s global supply chain network in order to mitigate the impact of
the correlated disruptive events and uncertainties. As the results in Table 16 indicate, if correlated disruptive events are not
considered because of the increase in the cost of managing disruptions, the total net profit will decrease.
Therefore, considering correlated disruptions in the supply chain in designing XEM’s GSC network under disruptions has a
considerable impact on improving the performance of its global supply chain.
When disruptions occur in a supply chain, the total cost of the supply chain’s operations increases because of the signif-
icant reduction in both the chain capacity and demand satisfaction. Therefore, in the face of disruptions, if none of the pro-
posed resilience strategies are applied, the total net profit of the supply chain will decrease (see Table 17). Due to the
computational complexity and time deficiency, fractional factorial design of experiments is adopted to evaluate all possible
combinations of resilience strategies (Montgomery, 2012). Based on the results of the experiment, thirty-two possible com-
binations of the resilience strategies (half of all possible selection combinations) are selected. All of the statistical analysis
computations are handled with Minitab 16.
In Fig. 12, the impacts of the proposed resilience strategies on the net after-tax profit of XEM’s GSC are shown. Only three
strategies, facility reinforcement, multiple sourcing, and facility dispersion, have significant impacts on mitigating risk of dis-
ruptions. As shown in Fig. 12, although the facility reinforcement strategy has the highest performance, the performance of
the multiple sourcing strategy is equal to the performance of the production of semi-manufactured products strategy. The
difference in the effectiveness of the proposed strategies lies in the nature of the considered disruptions in XEM’s GSC. Since
natural disasters are considered the main source of disruptive events in this study, different probabilities for disruption
occurrences are considered for different regions of the GSC facilities. Therefore, it seems reasonable to design the global sup-
ply chain structure with the aim of sharing the risk by delocalizing various facilities of the GSC and defining the proper
dependencies between them.
Among the six resilience strategies considered in this study, strategies with significant impacts on XEM’s GSC perfor-
mance have a major role in mitigating the risk of disruption scenarios. In Fig. 12, the three most effective strategies, facility
reinforcement, multiple sourcing, and facility dispersion, are consistent with the aforementioned risk sharing. The facility
reinforcement strategy can decrease the vulnerability of supply chain facilities in high-risk regions and maintain the desired
service level under disruptions. In addition, the facility dispersion strategy can avoid centralizing supply chain facilities in
one region. Although the centralized facility strategy can increase the vulnerability of a GSC network under disruptions in
one region, it can be economically accepted to design a centralized GSC network. Lastly, the multiple sourcing strategy
can decrease the dependency to single source suppliers in high-risk regions. In other words, using the multiple sourcing
strategy ensures there is more than one supplier for each part of products in regions with high risk.
As indicated in Fig. 13, all considered resilience strategies have positive (but different) impacts on the GSC performance.
The three strategies discussed in the previous paragraph have the significant positive impact on the net after-tax profit of the
GSC of XEM. The extra inventory strategy has the lowest impact on XEM’s GSC performance as a consequence of facing
uncertainty under disruption conditions and necessity for more agility and responsiveness to satisfy customers’ demand.
In addition, the semi-manufactured production and alternative BOM adoption strategies have more impacts on the GSC
performance than the extra inventory strategy due to their roles in enhancing flexibility of the XEM GSCN model in response
to the uncertainty of customers’ demand. The model with these three major strategies can demonstrate 98.92% of variation
in the net after-tax profit.
As mentioned earlier, global sourcing is an important issue for executive managers of GSC networks as a tool to enhance
the supply chain resilience under disruptions when they consider cost-benefit analysis. Therefore, determining the optimal
Scatterplot of Total net after-tax profit vs Instance

3400 Sourcing strategy
Total net after-tax profit (Billion IRRs)
Dual sourcing
3300 Multiple sourcing
Single sourcing
3200
3100
3000
2900
2800
2700
2600
2500
25 26 27 28 29 30
Instance
Fig. 14. Total net after-tax profit of the obtained Pareto solutions for large instances (25)–(30) via considering different sourcing strategies.
Interaction Plot for Net profit after tax

Data Means
-1 1 -1 1 -1 1 -1 1 -1 1
90 Facility
fortification
Facility fortification 60 -1
30 1
90 Facility
Multiple
fortification
sourcing
Multiple sourcing 60 -1 -1
30 1 1
Facility
Multiple
Semi-manufactured
90
fortification
sourcing production
Semi-manufactured production 60 -1 -1 -1
30 1 1 1
Multiple
Facility
Semi-manufactured
Facility
90
fortification
sourcing
dispersionproduction
Facility dispersion 60 -1-1-1 -1
30 1 11 1
Facility
Multiple
Semi-manufactured
Facility
Keeping
90
fortification
sourcing
dispersionproduction
inventory
Keeping inventory 60 -1-1-1-1 -1
30 111 1 1
Alternative BOM adaption
Fig. 15. Interaction plot of proposed strategies for net after-tax profit.
Fig. 16. The performance of the most significant strategies on net after-tax profit of XEM GSC under disruption.
Fig. 17. Inventory cost of XEM GSC via considering three most significant strategies to deal with disruptions.
Table 18
Impact of the dispersion strategy on the global supply chain structure.
Three types of considered risk region, including high, medium and low risk region, are presented in dark, gray and white, respectively.
sourcing strategy has an important effect on the GSC performance. In Fig. 14, the performance of the flexible and resilience
sourcing strategies on the total net after-tax profit of XEM’s GSC under different uncertainty budgets for large instances
(25)–(30) is shown. Results indicate that adopting a single sourcing strategy brings a smaller profit margin than the dual
or multiple sourcing strategies, because of increase in the cost of lost sales as a result of the supply disruption and demand
uncertainty. In addition, adding the second supplier makes higher marginal profit than adding an additional third supplier,
while the obtained marginal profit by adding a second supplier increases as the uncertainty budget decreases. An increase in
the number of sources leads to an increase in the total cost of the supplier relationship management.
In Fig. 15, the interactions among the proposed strategies and their impacts on the performance of XEM’s GSC (in terms of
the total net after-tax profit) are presented. Keeping extra inventory interacts with other strategies, such as the adoption of
alternative BOM production and production of semi-manufactured products strategies. In other words, when there is suffi-
cient inventory of the required parts in distributors, the adoption of alternative BOM and production of semi-manufactured
products strategies are not applied. In addition, based on the results shown in Fig. 15, facility reinforcement, multiple sour-
cing, and production of semi-manufactured products strategies have not had significant interactions with other strategies.
As demonstrated in Fig. 16, facility fortification, facility dispersion and multiple sourcing strategies have a significant
impact on the performance of the GSC in terms of the net after-tax profit for large instances (25)–(30). The net after-tax profit
of GSCs decreases as the uncertainty level (budget) increases, because of the increase in the cost of coping with uncertainties.
Table 19
Impact of the multiple sourcing strategy on supply chain structure.
Table 20
Impact of the fortification strategy on supply chain structure.
In other words, higher budget values result in more conservative GSC configurations, which results in less profit. Minimum
budget values represent a nominal deterministic model without uncertainty (see test problem 30); however, instances with
maximum budget values represent the highest level of uncertainty (see test problem 25). In addition, the inventory cost
could be an effective measure for evaluating performance of supply chains. As shown in Fig. 17, when the uncertainty level
of wholesalers’ demand increases, the inventory cost decreases. This demonstrates an agile paradigm behavior of the
proposed robust model under uncertainty.
All results shown in Figs. 12–17 demonstrate, the impact of resilience strategies on the performance of XEM’s GSCN.
Applying resilience strategies affects the design of a GSCN through designing the structure and improving the net profit
of the supply chain. For instance, by applying the fortification and dispersion strategies, the supply chain facilities are located
in regions with lower risk compared with the absence of these strategies (see Table 18). Therefore, it is anticipated that the
vulnerability of global supply chains under disruptions is reduced as a result of applying these resilience strategies. In addi-
tion, selected suppliers, as a single source of supplying parts, are not located in high-risk regions as shown in Table 18.
Furthermore, this action can efficiently reduce the vulnerability of the supply chain under disruptions. For instance, the
two considered suppliers (i.e., supplier number two and three) are dispersed to supply part two in regions with different risk.
Additionally, the impact of applying the multiple sourcing strategy on the structure of XEM‘s GSC is shown in Table 19.
Considering the BOM list, all irreplaceable parts are supplied through two different sources, while all replaceable parts are
supplied by a single source. This sourcing strategy can reduce the vulnerability of the supply chain under supplier disrup-
tions. On the other hand, applying the dispersion and multiple sourcing strategies simultaneously means 85% of selected
suppliers for one supply channel are dispersed in different risk regions.
The impact of the fortification strategy on the structure of the supply chain is shown in Table 20. Based on the results,
almost 86% of the located suppliers in high or medium risk regions are fortified. In addition, almost 72% of the located man-
ufacturers in high or medium risk regions are fortified. While the located facilities are dispersed in different risk regions, sup-
pliers in high-risk regions are fortified, whether they are primary or backup suppliers.
Finally, the following implications can be inferred from the mathematical model and computational results as managerial
insights for decision makers and managers of global supply chains:
The proposed comprehensive mathematical model is solved based on a real-life case study of a new medical device man-
ufacturer; however, the model is generalizable for other global supply chain networks. The proposed model can be used
for various GSC models with continuous changing business environments. In addition, the proposed model can be used
for various GSC models when disruptive events and uncertain parameters happen.
Using the set of resilience strategies, facility dispersion, facility fortification, production of semi-manufactured products,
multiple sourcing, keeping an inventory, and using primary and alternative BOM, provides a realistic tool to design an
efficient global supply chain network under correlated disruptions; however, each strategy has specific effects on the
performance of GSC networks, as well as an interdiction effect with other strategies, as a result of its role in designing
a resilient structure. Decision makers should determine the impact of each resilience strategy while designing efficient
GSCN under correlated disruptions.
Using the concept of robust budget based uncertainty provides a realistic, as well as useful, tool to handle uncertainty
through consideration of different decision maker’s degree of conservativeness. The proposed robust model can help sup-
ply chain managers with transforming their supply chains into agile ones, because it demonstrates a decrease in the
inventory cost when the uncertainty level of parameters increases.
When the uncertainty budget is increasing, the computational results demonstrate the decrease in the total after tax
profit of GSCN. The higher budget values result in more conservative GSC configurations. In addition, all of the six con-
sidered resilience strategies have positive effect on the performance of GSCs under disruptions; however, three strategies,
facility fortification, facility dispersion, and multiple sourcing strategies, have the most important positive effect on the
performance of GSCs under disruptions. In the proposed GSCN, a multiple sourcing strategy is adopted to supply irre-
placeable parts of products while all selected suppliers are dispersed in different risk regions. In addition, while the
located facilities of GSC are dispersed along different risk regions, most of the selected suppliers in high-risk regions
are fortified, whether they are primary or back up suppliers.
8. Conclusion
In this paper, six resilience strategies are proposed to deal with disruptions in designing robust GSC networks under dis-
ruption and uncertainty: (1) facility dispersion, (2) facility reinforcement, (3) production of semi-manufactured products, (4)
multiple sourcing, (5) keeping an inventory, and (6) considering primary and alternative BOM. The proposed model is solved
for an electro-medical device manufacturer company under the ECOTA. The aim of the proposed model is to maximize the
net after-tax profit of the studied GSCN under normal and disrupted conditions at the same time. Two uncertainty param-
eters, the procurement cost and product demand, are considered via the robust optimization. Results of the statistical anal-
ysis indicate that three strategies, facility reinforcement, multiple sourcing, and facility dispersion, have the most significant
impact on the GSC performance, among the six resilience strategies. Therefore, the vulnerability of GSC against the occur-
rence of disruptions will decrease efficiently through applying these strategies. Despite the appropriate acquired ability to
deal with disruptions, inventory cost decreases as the uncertainty level increases. This observation shows the agile paradigm
behavior of the proposed model under uncertainty and disruption conditions. In addition, the net after-tax profit decreases
as the uncertainty budget increases. Therefore, the proposed model suggests more conservative GSC configurations against
the higher uncertainty level.
In addition, a hybrid Taguchi-based memetic algorithm is developed that incorporates parallel ALNS as its local search
heuristic to tackle the proposed MINLP model. The proposed TPALNS uses the Hill Climbing heuristic, as well as the Tabu
list, for a more in-depth local search. The selection order of neighborhood structures in the proposed TALNS is determined
efficiently with the fitness landscape analysis. The proposed TPALNS has a superior performance in comparison with the
hybrid MA with generic TALNS with regards to the solution quality and search time. Additionally, the positive role of par-
allelization for exploring solutions has been confirmed.
Further research can be conducted based on the following suggestions in two categories. First, various strategic and
tactical decisions for designing GSC that are consistent with real-world characteristics could be integrated with GSCND, such
as the selection of facilities production technologies and global transportation planning. Second, the wider effects of disrup-
tions of the performance of supply chain networks, such as the impact of disruptions on lead time or capacity of global trans-
portations systems, could be considered. Finally, proposing efficient solution algorithms and using new paradigms, such as
hyper-heuristics in decreasing the search time of solving complex mathematical models and developing a more efficient
heuristic algorithm such as Lagrangian relaxation heuristic with tight bounds, is in the interest of GSC managers.
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Transportation Research Part E 87 (2016) 20–52

Contents lists available at ScienceDirect

Transportation Research Part E

Robust global supply chain network design under disruption

⇑ Corresponding author. Tel./fax: +98 23 32392204.

2.1. International considerations in GSCND

2.2. Disruptions in GSCND

2.3. Uncertainty considerations in GSCND

A. Hasani, A. Khosrojerdi / Transportation Research Part E 87 (2016) 20–52

RO i.e., robust optimization.

2.4. Solution algorithms for GSCND models

3. Problem definition: the case of elector-medical device manufacturer

Fig. 1. The schematic overview of the studied GSC network.

Properties The countries within the SC scope

Strategy Domain of strategy Effect of strategy on supply chain operation

4.2. Mathematical model formulation

4.2.1. Objective function

ERF krt 6 EF krt 8k; 8r; 8t ð13Þ

ERAmrt 6 EAmrt 8m; 8r; 8t ð20Þ

ERW irt 6 EW irt 8i; 8r; 8t ð23Þ

CRZ mv tn P CSRMmv tn 8v ; 8m; 8n; t P 2 ð34Þ

Nonlinear term Constraint Nonlinear term Linearization method

PRO1ov tn þ ZRO1ov tn P d1sov t 8o; 8v ; 8t; 8n ð39Þ

ltpsmkment 6 TPSMkment 6 utpsmkment 8k; 8m; 8e; 8n; 8t ð40Þ

ltpmwmiv nt 6 TPMW miv nt 6 utpmwmiv nt 8m; 8i; 8v ; 8n; 8t ð41Þ

Create an initial population of

Fitness function evaluation

Improve the best solution of the current generation

Generate next population via:

Fitness function evaluation

Improve the best solution of the current generation

Fig. 2. The structure of the proposed memetic algorithm.

Main Fortified Fortified

Fig. 3. The schematic overview of the proposed encoding representation.

5. Proposed solution algorithm: PTMA-TPALNS

5.1. Representation and evaluation of solution chromosomes

5.2. Initial and next population generation

Fig. 4. Flow diagram of the roulette-wheel selection procedure.

Fig. 5. Procedure of proposed Taguchi-based crossover operator.

5.3. TPALNS algorithm: a fitness landscape analysis and parallelization approach

Destroy neighborhood structures

Repair neighborhood structures

DIAMðPÞ ¼ Max distðs; tÞ ð43Þ

Scope Parameter Instance

Design factors Algorithms Levels Noise factors Levels

Parameter Value Parameter Value

Interval Plot of Dmm

6. Computational experiments and results

Neighborhood structure Maximize net after-tax profit

6.1. Experimental results of landscape analysis in the proposed TALNS

6.2. Efficiency evaluation of the proposed PTMA-TPALNS

Instance Scope Best known LINDOGLOBAL GA TMA-ALNS TMA-TALNS

A. Hasani, A. Khosrojerdi / Transportation Research Part E 87 (2016) 20–52

Average 0.00 23.33 0.00 19.23 0.00 23.78 0.00 21.42

Average 15.16 96 11.11 30.93 4.59 35.69 0.00 33.96

A. Hasani, A. Khosrojerdi / Transportation Research Part E 87 (2016) 20–52

Instance Scope Best known CT (h)a GA TMA-TALNSFixedTime TMA-

IR average 0.00 3.18 3.18 2.19

IR & AZ average 8.68 0.00 3.09 4.06

Instance Scope Best known CT (h)a GA TMA-TALNSFixedTime TMA-

Instance Scope Best known solution TMA-TALNS PTMA-TPALNS

Fig. 10. The proposed Lagrangian relaxation heuristic algorithm.

Fig. 11. The proposed lower bound heuristic algorithm.