Production-distribution network design of a global supply chain alliance from the key player's perspective

A key player in a supply chain (SC) is the member who overlooks and leads others. Although it can compel its autonomous members to follow the planning of a production-distribution network (PDN), the key player has to create an environment in which the partnership with suppliers can also grow accordingly. Without the effective partnership, the efforts increase in managing and integrating the information and material flow across the PDN. Hence, while designing the PDN, the key player has to consider the constraint of the autonomous suppliers also seeking maximum profits as their business goals. In addition, to alleviate the impact of uncertainty on the PDN of a global SC, the strategy of alternative design features is incorporated in the PDN design model. In this paper, the problem for key player's PDN design with alternative design features (KPDN/ADF) is formulated as a bi-level programming problem. An extended genetic algorithm is proposed to solve the KPDN/ADF problem. The experiment results showed that the proposed algorithm can solve the problem satisfactorily. Furthermore, incorporating the product design strategy of alternative design features can make the key player's PDN have better profit under the uncertainty of the currency exchange rate. An illustrative global SC of personal computers/notebooks is also provided to demonstrate the applicability of the KPDN/ADF design model.