A new model for joint optimization with considering fast moving consumer goods in multi-channel network (A case study)

Abstract

The purpose of this article is to present a model for simultaneous optimization of pricing, marketing, distribution and sales decisions. Due to the high importance of time and costs along the chain, this model will be very attractive. In previous studies, these decisions have not been considered simultaneously. This paper introduces a bi-objective model including utility maximization and profit maximization. Then it was solved using LP metric method in GAMS optimization software and Gurobi Optimizer in Python environment. After solving the model, the decision variables have been obtained and the model has been subjected to sensitivity analysis. Based on the results obtained, it can be concluded that optimizing distribution network elements simultaneously saves time and money and improves distribution network performance. A trade-off matrix and Pareto chart is ​​provided in which the numbers on the main diagonal represent the most optimal state for each objective. In addition, a comparison was made between the results of the GAMS and Gurobi Optimizer in the Python showing that in larger sizes the Gurobi Optimizer delivers the desired results in a more reasonable time. Also, the results show the sensitivity of the model to the competitors' prices.