Standard Article

Integrated Supply Chain Design Models

  1. Ho-Yin Mak1,
  2. Zuo-Jun Max Shen2

Published Online: 15 FEB 2011

DOI: 10.1002/9780470400531.eorms0414

Wiley Encyclopedia of Operations Research and Management Science

Wiley Encyclopedia of Operations Research and Management Science

How to Cite

Mak, H.-Y. and Shen, Z.-J. M. 2011. Integrated Supply Chain Design Models. Wiley Encyclopedia of Operations Research and Management Science. .

Author Information

  1. 1

    The Hong Kong University of Science and Technology, Department of Industrial Engineering and Logistics Management, Clear Water Bay, Kowloon, Hong Kong

  2. 2

    University of California, Department of Industrial Engineering and Operations Research, Berkeley, California

Publication History

  1. Published Online: 15 FEB 2011

Abstract

Traditional facility location models tend to focus on the trade-off between some measure of budget, often measured by fixed location costs, and some measure of convenience to customers, usually measured by the distance between customers and the respective nearest facilities. This simple setup, although proven to be effective in many other applications, fails to cover potential effects of tactical and operational issues on the strategic design decisions in supply chain settings. For example, inventory sharing and delivery vehicle consolidation lead to economies of scale in the operations of the facilities and thus affect the optimal distribution network configuration. Recently, researchers began to study integrated supply chain design models that take into account important tactical and operational issues when making strategic decisions on facility location and network design. In this article, we review some recent work that belongs to this new research stream. We discuss various modeling issues and the potential benefits of using integrated models over using traditional location models.

Keywords:

  • supply chain;
  • network design;
  • facility location;
  • inventory;
  • integer programming