Solving the Multi-Layer Dynamic Facility Location-Allocation Design Problem in Supply Chain Networks Using SSP Algorithm

The efficient design of the supply chain network is crucial for good performance and robust functionality. In this paper, the facility location-allocation problem, in the strategic stage of supply chain design, is considered. The problem is studied for a 4-layer supply chain network; suppliers, plants, distribution centers, and demand points (customers). Location decisions are considered in 2 layers; plants and distribution centers. The problem model addresses inventory levels, flow of products, and positions of the customer order decoupling point (CODP), in a multi-period (dynamic) planning horizon. In an earlier study, the problem was formulated as a non-linear integer programming model with a profit maximization objective. In this sequel paper, a solution algorithm is developed to solve the problem based on the successive shortest path (SSP) algorithm. A computational study is conducted, and it shows that the SSP algorithm performs well regarding solution quality and computational time.