Document Type: Research Paper
Department of Industrial Engineering, Science and Culture University, Tehran, Iran
Department of Industrial Engineering, Science and Research Branch, Islamic Azad University, Tehran, Iran
Technology Development Institute, Department of Industrial Engineering, Tehran, Iran
This paper investigates the problem of designing an integrated production-distribution system which supports strategic and tactical decision levels in supply chain management. This overall optimization is achieved using mathematical programming for modeling the supply chain functions such as location, production, and distribution functions. Our model intends to minimize the total cost including production, location, transportation, and inventory holding costs. In view of the NP-hard nature of the problem, this paper provides a hybrid algorithm incorporates Genetic Algorithm into Lagrangian Relaxation method (namely HLRGA) to update the lagrangian multipliers and improve the performance of LR method. The effectiveness of HLRGA has been investigated by comparing its results with those obtained by CPLEX, hybrid genetic algorithm, and simulated annealing on a set of supply chain network problems with different sizes. Finally, an industrial case demonstrates the feasibility of applying the proposed model and algorithm to the real-world problem in a supply chain network.