DEVELOPING SUPPLY CHAIN NETWORK WITH PIECEWISE LINEAR TRANSPORTATION COST FOR A SMALL-AND-MEDIUM ENTERPRISE (SME) IN CILEGON

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Bobby Kurniawan
Ade Irman
Akbar Gunawan
Ani Umyati
Evi Febianti
Nuraida Wahyuni
Putro Ferro Ferdinant
Ratna Ekawati
Fellek Getu Tadesse

Abstract

This study proposed a supply chain network for determining suppliers’ location in which the transportation costs are a piecewise linear function. The supply chain network consists of a production facility, suppliers, and customers. These types of costs are found in the fields of transportation, logistics, and purchasing discount. First, the supply chain network is formulated as the mixed-integer non-linear programming (MINLP) because piecewise linear transportation cost makes the model non-linear. Then, the model is transformed into a mixed-integer programming (MIP) model using the convex-combination method to overcome this nonlinearity. The model was used for solving the problem faced by a small and medium enterprise (SME) in Cilegon. The MIP was solved using the CPLEX software. Sensitivity analysis was carried to provide the SME with several alternatives in handling the suppliers’ location problem

Article Details

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Articles
Author Biographies

Ade Irman, Department of Industrial Engineering, Sultan Ageng Tirtayasa University

Department of Industrial Engineering

Akbar Gunawan, Department of Industrial Engineering, Sultan Ageng Tirtayasa University

Department of Industrial Engineering

Ani Umyati, Department of Industrial Engineering, Sultan Ageng Tirtayasa University

Department of Industrial Engineering

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