Joint Optimization Of Supplier Selection And Logistics Center Location In The Presence Of Supply Risk

The 2022 winter Olympics will be held in Beijing,its suburban Yanqing County,and nearby Zhangjiakou City.Take Olympic vegetables supply as an example.It is well known that production bases(suppliers)and processing plants(logistics centers)play significant roles in the vegetable supply,but because of the potential severe weather conditions in winter,suppliers,capacity and transportation may be affected simultaneously,which will make the production and transportation routes uncertain.Therefore,how to make decisions on supplier selection,facility location as well as order allocation and traffic links determination under this kind of risk and how to make contingency plans for each risk scenario to ensure the supply security are the problems Beijing Organising Committee(BOC)is concerned with when designing a reliable logistics network.Motivated by the 2022 Winter Olympics logistics network design problem,in this paper,we seek to address the joint decision problem on vegetable supplier selection,facility location as well as order allocation and traffic links determination in the three-tier supply network which consists of supply,logistics center and demand nodes.A model without considering supply risk is first presented.Based on that,we further propose a two-stage stochastic mixed integer programming(MIP)which takes the supply risk,supply rate and contingency plans into consideration.In addition,we design a hybrid algorithm based on the structure of the MIP,which includes GA for supplier selection and logistics center location,and a constructive heuristic algorithm for order allocation and network flow.All algorithms are programmed in MATLAB.By comparing with the branch and bound algorithm in CPLEX 12.7.0 with the YALMIP interface and the hybrid algorithm based on GA and PSO,the advantages of our algorithm are proved.It can obtain high-quality,near-optimal solutions in a short period of time.Especially,the advantage are more obvious in the relatively big problems.Then,by collecting data regarding 2022 Winter Olympics,we conduct extensive numerical experiments to simulate the logistics network design.We find that:(?)It is possible to make substantial improvements in supply rate with a little cost;meanwhile,the proposed solution is robust to demand variations,(?)The overall supply risk is related to the correlation of the suppliers' disruption risks,and a high-risk supplier may be selected under some cases to improve the supply rate.Managers should pay more attention to the risk correlation between suppliers.(?)The number of logistics centres has little impact on the supplier selection,the order quantity and the supply rate but has high impact on transportation time and transportation cost.For 2022 Olympic Games,we recommend selecting multiple centers.The two-stage stochastic mixed integer programming and the idea of algorithm proposed in this paper are not only helpful to BOC when designing the vegetable supply network,but also applicable for firms which face supply risk when designing their supply chains.Those finds are worth using for reference.