Multi-criteria fuzzy optimization for locating warehouses and distribution centers in a supply chain network

Abstract

This study considers the planning of a multi-product, multi-period, and multi-echelon supply chain network that consists of several existing plants at fixed places, some warehouses and distribution centers at undetermined locations, and a number of given customer zones. Unsure market demands are taken into account and modeled as a number of discrete scenarios with known probabilities. The supply chain planning model is constructed as a multi-objective mixed-integer linear program (MILP) to satisfy several conflict objectives, such as minimizing the total cost, raising the decision robustness in various product demand scenarios, lifting the local incentives, and reducing the total transport time. For the purpose of creating a compensatory solution among all participants of the supply chain, a two-phase fuzzy decision-making method is presented and, by means of application of it to a numerical example, is proven effective in providing a compromised solution in an uncertain multi-echelon supply chain network.