Worldwide globalization has made supply chains more vulnerable to risk factors, increasing the associated costs of outsourcing goods. Outsourcing is highly beneficial for any company that values building upon its core competencies, but the emergence of the COVID-19 pandemic and other crises have exposed significant vulnerabilities within supply chains. These disruptions forced a shift in the production of goods from outsourcing to domestic methods.
This paper considers a multi-echelon supply chain model with global and domestic raw material suppliers, manufacturing plants, warehouses, and markets. All levels within the supply chain network are evaluated from a holistic perspective, calculating a total cost for all levels with embedded risk. We formulate the problem as a mixed-integer linear model programmed in Excel Solver linear to solve smaller optimization problems. Then, we create a Tabu Search algorithm that solves problems of any size. Excel Solver considers three small-scale supply chain networks of varying sizes, one of which maximizes the decision variables the software can handle. In comparison, the Tabu Search program, programmed in Python, solves an additional ten larger-scaled supply chain networks. Tabu Search’s capabilities illustrate its scalability and replicability.
A quadratic multi-regression analysis interprets the input parameters (iterations, neighbors, and tabu list size) associated with total supply chain cost and run time. The analysis shows iterations and neighbors to minimize total supply chain cost, while the interaction between iterations x neighbors increases the run time exponentially. Therefore, increasing the number of iterations and neighbors will increase run time but provide a more optimal result for total supply chain cost. Tabu Search’s input parameters should be set high in almost every practical case to achieve the most optimal result.
This work is the first to incorporate risk and outsourcing into a multi-echelon supply chain, solved using an exact (Excel Solver) and metaheuristic (Tabu Search) solution methodology. From a practical case, managers can visualize supply chain networks of any size and variation to estimate the total supply chain cost in a relatively short time. Supply chain managers can identify suppliers and pick specific suppliers based on cost or risk. Lastly, they can adjust for risk according to external or internal risk factors.
Future research directions include expanding or simplifying the supply chain network design, considering multiple parts, and considering scrap or defective products. In addition, one could incorporate a multi-product dynamic planning horizon supply chain. Overall, considering a hybrid method combining Tabu Search with genetic algorithms, particle swarm optimization, simulated annealing, CPLEX, GUROBI, or LINGO, could provide better results in a faster computational time.
| Identifer | oai:union.ndltd.org:CALPOLY/oai:digitalcommons.calpoly.edu:theses-3849 |
| Date | 01 June 2021 |
| Creators | Nahangi, Arian A |
| Publisher | DigitalCommons@CalPoly |
| Source Sets | California Polytechnic State University |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | Master's Theses |
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