A Linear Programming Approach for Supply Network Planning based on Supply Chain Collaboration Strategy

In this paper, we propose a linear programming model of supply planning process for the supply chain collaboration strategy of a company. The amount of its supplying quantity relies on outsourcing suppliers heavily. Conversely, the revenues of those suppliers are highly dependent on the supplying quota from the supply network planning of the company. In order to keep the supply stable through collaboration, the company builds such a policy to guarantee the fairness on revenue between the supplies. For this, the supply network plan should keep the capacity utilization ratio even for all the suppliers. But the production capacities are different and the distribution of molds is disproportional through suppliers, so the supply network plan is not easily established with simple arithmetic processes. Therefore, we developed the linear programming model with those target function and constraints minimizing the costs for holding inventory and penalty of delayed delivery, simultaneously guaranteeing the even capacity utilization through suppliers. The proposed model has been applied to real case and the evaluation for the planning result from the model would be followed in order to make sure that our model guarantee on extracting the supply network plan subordinated to the policy. Also we mention about further studies for improvement of the model.

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