I set of manufacturers
K set of suppliers
L set of products
M total length of time periods
Decision variables
QSumkl The lth product quantity which has been transported from kth supplier to warehouse in mth period
QStmil The lth product quantity which has been transported from warehouse to ith manufacturer in mth
period
Parameters
CStil unit transportation cost of lth product between warehouse and ith manufacturer
CSukl unit transportation cost of lth product between kth supplier and warehouse
CWl unit waiting cost of lth product in warehouse
CDl unit penalty cost for delaying of lth product to manufacturers
Dmil the lth product demand of ith manufacturer in mth period
Ak capacity of kth supplier
AWH total capacity of warehouse for all products
Qssl safety stock level for lth product in warehouse
Sil starting inventory level of lth product in warehouse
Inml the warehouse inventory level of lth product in mth period
Sdl delayed lth product level at the beginning for all manufacturers
Dlml the lth product quantity which has been delayed in mth period
Tsti the transportation time between the warehouse and ith manufacturer
Tsuk the transportation time between kth supplier and the warehouse
l indices for products
i indices for manufacturers
k indices for suppliers
m indices for periods
t indices for the permitted delaying time to manufacturers
a length of the permitted delaying time
The first line in the objective function includes transportation costs from suppliers to warehouse and from
warehouse to manufacturers. The second part deals with the holding inventory cost in warehouse and the
last part is related with the penalty cost for not delivered on-time products. While the objective function tries
to minimize the sum of these cost parts, transportation and warehousing functions are satisfied separately.
The last part of the objective function also deals with minimizing the delaying products that can be thought
as the overall objective of the SN. This part of the objective function is calculated by multiplying the product
quantities, which are delayed to the manufacturers, by the unit penalty cost. The aim is to provide on-time
deliveries to increase customer (manufacturer) satisfaction. This aim requires the cooperation of transportation
and warehousing functions. Otherwise, the transportation function tries to use slower and cheaper
transportation modes at the cost of delaying and warehousing function also tries to send the product before
the delivery date to decrease the warehousing cost. These attitudes of the functional areas provide benefits
for themselves, but decrease the customer satisfaction degree. Therefore, minimizing the delayed cost is
determined as the overall objective of the model beside the individual transportation and warehousing
objectives.
The first constraint (Eq. (2)) guarantees that the total lth product quantity which is transported in
(m Tsuk)th period from suppliers to warehouse and warehouse stock of (m-1)th period must be greater
than or equal to the total transported lth product quantity in mth period from warehouse to manufacturers
that is able to satisfy the demand of (m + Tsti)th period. Eq. (3) shows the warehouse inventory levels
of each product in mth period. Eq. (4) ensures the demand of the manufacturers for lth product in mth
period satisfied at most in (m + a) periods. Eq. (5) shows the delayed lth product quantity for all manufacturers
in mth period. Eq. (6) ensures the total inven