for model analysis and execution of a mathematical programming model to
obtain a recommendable global production-logistics system.
Details of each step are given in the following description.
Step 1: integer programming model development
This step is the core of the proposed procedure for minimum cost network
design and is formulated in terms of an integer programming model.
Step 2: data preparation
This step is the preparatory module for execution of an integer programming
analysis. Data items necessary for the analysis are defined and classified to
guarantee easy preparation of investigation. Then, raw data such as production
cost of specific parts in each country, materials logistics cost between specified
countries etc. are collected, evaluated and summarised in terms of the database.
This step can be divided into the following two sub-procedures.
Step 2-1: Preparation of operational variables and industrial indices. This
sub-procedure is for the database construction of each country's industrial
indices and production-logistics related operations.
Step 2-2: Evaluation of technology indices Gil. This sub-procedure creates the
technology index value of each country for forthcoming mathematical
programming analysis. As shown in Figure 3, this procedure contains four substeps,
i.e. a relationship analysis between car parts and industrial functions
which creates a cross-relational matrix of car parts/components and industries,
measurement of the industrial strength of each country and its rating against
Japan which creates the data of industrial scale rate of each production function, estimation of each country's manufacturing defect rate, and an
evaluation of its manufacturing technology index value from the defect rate
which are performed by the formulae described in the figure.
Where SRil : Industrial scale rate of production function of item i in
country l to Japan
DRil : Defect rate of item i production in country l
Gil : Technology index of country l for item i production
Step 3: Integer programming analysis
This sub-procedure is the most time consuming part of the proposed procedure.
It is aimed at the minimum cost design of the objective system. In this paper,
the design problem of an international production-logistics network system is
investigated, which tries to draw a rational industrial structure for car
manufacturing in an expanded ASEAN-China region. From this analysis, the
validity of the developed mathematical model is expected to be ascertained.