The Multiple Supply Chain Design Problem: Integration of Multiple Configurations Based on Product, Customer, and Supply Chain Characteristics

Abstract

It has become widely accepted that delivering diverse products to customers who have different needs by a “one-size-fits-all” supply chain results in lower profits and customer service. Therefore, there is a need to design supply chain systems that can effectively and profitably serve products and customers with diverse characteristics. This paper presents a mathematical model that selects the optimal set of supply chains that match diverse characteristics of products and customers. The model considers various product, customer, and supply chain characteristics, including the required lead time, the supply chain lead times, the customer time sensitivity, and the complexity factor resulting from having multiple supply chains. An example and a sensitivity analysis are used to demonstrate the model's capabilities.