Abstract

ABSTRACT

The supply chain is characterized by the presence of different types of players at

various levels with spatially dispersed entities, each having their own cost and
production characteristics. Supply chain optimization problems involve complexities,
and there are many trade-offs to be made among the multiple objectives of the different
players. In such a situation, single-objective solutions may not provide solutions that
satisfy the objectives of each entity in the supply chain as optimal solution for one entity
is non-optimal for others. Hence analysis of the conflicting objectives is necessary to
arrive at a negotiated solution. This can be achieved using multiobjective programming
techniques.

In this project, a mathematical model is developed to optimize the supply chain

based on the impact of three important performance measures of cost, quality and
service levels. Multiobjective programming method is used to achieve optimization
solutions for a three echelon supply chain consisting of suppliers, manufacturers and
distributors. The results of the trade-off analysis generated appropriate alternatives to
sufficiently provide the decision makers with a clear insight among the trade-offs
involved in the optimization process.

Acknowledgements

ACKNOWLEDGEMENTS

This project has been made possible with the guidance, advice and support of a
lot of people. With due respects, I would like to express my gratitude and appreciation to
them.

First, I express my special thanks to my guide Mr. Daniel Rajkumar for his
valuable guidance and supervision.

Secondly, I express my special thanks to Mr. Sheshadri Krishnamurthy, who

helped me in learning GAMS software that is used for analysis in this project. My
thanks to my colleagues for all the help they have provided me during the course.

Finally, I must acknowledge that it would not have been possible for me to
complete my higher studies without the unflinching support by my loving parents and
through the grace of God.

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Table of contents

TABLE OF CONTENTS

ABSTRACT........................................................................................................................ i
ACKNOWLEDGEMENTS ............................................................................................... ii
TABLE OF CONTENTS.................................................................................................. iii
LIST OF FIGURES ........................................................................................................... v
LIST OF TABLES ............................................................................................................. 6
CHAPTER 1 .................................................................... Error! Bookmark not defined.
INTRODUCTION ........................................................... Error! Bookmark not defined.
1.1 The importance of supply chain management ..... Error! Bookmark not defined.
1.2 The need for supply chain optimization .............. Error! Bookmark not defined.
1.3 Motivation............................................................ Error! Bookmark not defined.
1.4 Objectives ............................................................ Error! Bookmark not defined.
1.5 Scope.................................................................... Error! Bookmark not defined.
1.6 Organization of the project .................................. Error! Bookmark not defined.

CHAPTER 2 .................................................................... Error! Bookmark not defined.

LITERATURE REVIEW ................................................ Error! Bookmark not defined.
2.1 Supply chain management ................................... Error! Bookmark not defined.
2.2 Key issues in supply chain management ............. Error! Bookmark not defined.
2.3 Multiple objectives in the supply chain ............... Error! Bookmark not defined.
2.4 Optimization of supply chains ............................. Error! Bookmark not defined.
2.5 Multiobjective techniques in supply chain problems ......... Error! Bookmark not
defined.
2.6 Summary .............................................................. Error! Bookmark not defined.

CHAPTER 3 .................................................................... Error! Bookmark not defined.

THE MULTIOBJECTIVE MODEL ............................... Error! Bookmark not defined.

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Table of contents

3.1 Formulation of the General multiobjective programming Problem ............. Error!

Bookmark not defined.
3.2 NonInferiority ...................................................... Error! Bookmark not defined.
3.3 Benefits of multiobjective approaches ................. Error! Bookmark not defined.
3.4 Multiobjective programming methods................. Error! Bookmark not defined.
3.5 Model formulation ............................................... Error! Bookmark not defined.
3.6 Objectives ............................................................ Error! Bookmark not defined.
3.7 Constraints ........................................................... Error! Bookmark not defined.
3.8 Optimization software.......................................... Error! Bookmark not defined.
3.9 Summary .............................................................. Error! Bookmark not defined.

CHAPTER 4 .................................................................... Error! Bookmark not defined.

THE CASE STUDY ........................................................ Error! Bookmark not defined.
4.1 Description of the case- study.............................. Error! Bookmark not defined.
4.2 Supplier data ........................................................ Error! Bookmark not defined.
4.3 Manufacturer data ................................................ Error! Bookmark not defined.
4.4 Distributor data .................................................... Error! Bookmark not defined.
4.5 Methodology used for generating the alternativesError! Bookmark not defined.
4.6 Discussion of the results ...................................... Error! Bookmark not defined.
4.7 Trade-off analysis 1 ............................................. Error! Bookmark not defined.
4.8 Trade-off analysis 2 ............................................. Error! Bookmark not defined.
4.9 Significance of the trade-off scenarios ................ Error! Bookmark not defined.
4.10 Summary ............................................................ Error! Bookmark not defined.

CHAPTER 5 .................................................................... Error! Bookmark not defined.

CONCLUSIONS AND RECOMMENDATIONS .......... Error! Bookmark not defined.
5.1 Conclusions.......................................................... Error! Bookmark not defined.
5.2 Recommendations ................................................ Error! Bookmark not defined.

REFERENCES ................................................................ Error! Bookmark not defined.

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Table of contents

APPENDIX A : RESULTS ............................................. Error! Bookmark not defined.

LIST OF FIGURES

Figure 1.1: Driving forces of supply chain ...................... Error! Bookmark not defined.
Figure 2.3: Conflicting objectives ................................... Error! Bookmark not defined.
Figure 2.4: Optimization process ..................................... Error! Bookmark not defined.
Figure 3.1: A three echelon supply chain ........................ Error! Bookmark not defined.

Chapter1

Introduction

LIST OF TABLES
Table 3.1: A three-objective example .............................. Error! Bookmark not defined.
Table 4.1: Supplier data ................................................... Error! Bookmark not defined.
Table 4.2: Manufacturer data ........................................... Error! Bookmark not defined.
Table 4.3: Distributor data ............................................... Error! Bookmark not defined.
Table 4.4: Minimum value of the objectives ................... Error! Bookmark not defined.
Table 4.5: Order quantities for minimum objective valuesError! Bookmark not defined.
Table 4.6: Trade-off objective values for scenario 1 ....... Error! Bookmark not defined.
Table 4.7: Order quantities for scenario 1 ....................... Error! Bookmark not defined.
Table 4.8: Trade-off objective values for scenario 2 ....... Error! Bookmark not defined.
Table 4.9: Order quantities for scenario 2 ....................... Error! Bookmark not defined.

Chapter1

Introduction