An iterative approach for distribution chain design in agile virtual environment

Abstract

Purpose -The study sets out to explore the use of an iterative approach for designing distribution chain in an agile virtual environment; in an agile virtual environment, quick adaptation to changing market situation and automation of supply chain management processes are essential. Design/methodology/approach -The iterative approach consists of two parts: the strategic model and the tactical model. First, the strategic model (including number of distributors, location of distributors) is determined. Then, based on the output of the strategic model, the tactical model (i.e. the inventory planning at each node, and vehicle routeing between different nodes of the chain) is determined. After determining the tactical model, the operation-related parameters from the tactical model are input into the strategic model again, and the configuration of distribution chain is re-optimized. Such iterations proceed until the design result converges. Findings -The proposed iterative design process provides many advantages such as reuse of knowledge, adaptive to changing market conditions, modular design, and optimal results guaranteed by mixed mathematical usage. The proposed approach is also realizable as a supply chain management software tool. Originality/value -An important contribution of this study is the iterative process that uses three different types of mathematics. For determination of the strategic model mixed integer programming is used. Determination of the tactical model is effected using genetic algorithm and probability theory.

A service-oriented approach for developing adaptive distribution chain

“…The tactical module is further divided into four distinct modules: two modules for inventory control and two modules for transport. The author's earlier paper Ma & Davidrajuh (2005) presents complete mathematical details of all these modules; a summary is given in the following subsections.…”

“…How to determine routes for vehicles? Ma and Davidrajuh (2005) propose use of genetic algorithm for routing.…”

Structures for Stepwise Development of Adaptive Supply Chains

“…There are three types of distribution chain decisions that can be distinguished. They depend on the time horizon and on the significance of impact on the management of distribution chain: strategic decisions, tactical decisions, and operational decisions (Ma and Davidrajuh, 2005). The strategic decisions consider time horizons on the order of years; operational decisions involves short-term decisions, on the order of days; and tactical decisions fall between those two extremes with respect to the time horizon, and on their impact.…”

A conceptual model for ethical business decision making under the influence of personal relationships

“…Business decision-making which is crucial for the growth of any business, happens at all levels of a business, from strategic decisions about investment and direction of future growth taken by the board of directors, tactical decisions taken by the managers about how their own department may contribute most effectively to the overall business objectives, and operational decisions by all employees who make decisions about the conduct of their own tasks, responses to customers and improvements to business practice (Tutor2U, 2007; Ma and Davidrajuh, 2005). Decision-makers use of computer aids (spread sheets, decision support systems, knowledge bases, etc.)…”

“…Decision-makers use of computer aids (spread sheets, decision support systems, knowledge bases, etc.) to support their decision making process, and make use of mathematical models for the analysis of the problem, to measure the costs of chosen action, and to evaluate the quality of the decisions made (Ma and Davidrajuh, 2005).…”