Modeling the Trade-off between Manufacturing Cell Design and Supply Chain Design

Nowadays, we are witnessing the growth of firms that distribute the production capacity of their products to a wide geographic range to supply the demand of several markets. In this article, the relationships and interactions between cell design and supply chain design are investigated. For this purpose, a novel integrated model is presented for designing dynamic cellular manufacturing systems in supply chain design. Different components in the supply chain design, such as location of production facilities at a number of candidate sites, procurement of raw materials from suppliers, shipment of raw materials to production facilities, manufacturing of products, and distribution of products to markets are considered in dynamic environments. The costs concerning these components are minimized. Since the proposed problem is NP-hard, however, a genetic algorithm is presented for application of the model to real-sized instances. Numerical examples demonstrate that the algorithm performs successfully in searching for optimal or near-optimal solutions.