Analysis of supply chain network design model with quality cost

Abstract

© WCSE 2019. All rights reserved. Designing the supply chain network model that takes into account product quality could be one of the most key factors that significantly improve the performance of organizations and also affects the most customer satisfaction in a long-term period. However, this model is based on a single product and a single production stage. This paper aims at designing a three-echelon supply chain model including multiple suppliers, multiple manufacturers with multi-stages inspection, and multiple customers. The mathematical problem is formulated with Cost of Quality (COQ) integrated into Supply Chain Network Design (SCND) to minimize the total supply chain cost involving transportation costs and production costs. Further, the paper proposes a meta-heuristic called Particle Swarm Optimization algorithm used to solve the model for the supply chain lot size and sampling inspection strategy. From the numerical data of the case study, the developed technique can determine the minimum of total supply chain cost at quality inspection 30.95%.