A Goal Programming Model for Logistics Network Decisions Considering Service Factors

Supply chain management is integrated efforts and activities for a supply chain and supply chain design can be a critical factor in improving the performance of a supply chain. Logistics network decisions are an essential part of supply chain design. Many traditional optimization models for logistics network decisions are based mainly on cost minimization. However, today’s global competitiveness requires a more realistic logistics network decisions which employ integrated performance measures e.g. cost, quality, service etc. The objective of this research is to develop an optimization model for logistics network decisions considering not only cost but also service factors as performance measure, where the service factors are reliability of delivery time, reliability of physical condition of products, flexibility of normal/urgent deliveries. The contribution of this research is that we consider the service factors and use goal programming approach for the conflicting goals plus analytical hierarchical process for estimating weights. A non-linear, non preemptive, goal programming formulation is proposed with numerical examples.