Furniture supply chain tactical planning optimization using a time decomposition approach

Published Date
16 September 2008, Vol.189(3):952–970, doi:10.1016/j.ejor.2007.01.064

Author 

M. Ouhimmou ^a,b

S. D’Amours ^a,b,,

R. Beauregard ^b,c

D. Ait-Kadi ^a,b

S. Singh Chauhan ^d

• aDépartement de Génie Mécanique, Université Laval, Québec, Canada G1K7P4
• bCentre Interuniversitaire de Recherche sur les Réseaux d’Entreprise, la Logistique et le Transport (CIRRELT), Université Laval, Québec, Canada G1K7P4
• cDépartement des Sciences du Bois et de la Forêt, Université Laval, Québec, Canada G1K7P4
• dJohn Molson School of Business, Concordia University, Montreal, Canada, QC H3G 1M8

Received 1 October 2005. Accepted 1 January 2007. Available online 16 July 2007. 

Abstract

We study the supply chain tactical planning problem of an integrated furniture company located in the Province of Québec, Canada. The paper presents a mathematical model for tactical planning of a subset of the supply chain. The decisions concern procurement, inventory, outsourcing and demand allocation policies. The goal is to define manufacturing and logistics policies that will allow the furniture company to have a competitive level of service at minimum cost. We consider planning horizon of 1 year and the time periods are based on weeks. We assume that customer’s demand is known and dynamic over the planning horizon. Supply chain planning is formulated as a large mixed integer programming model. We developed a heuristic using a time decomposition approach in order to obtain good solutions within reasonable time limit for large size problems. Computational results of the heuristic are reported. We also present the quantitative and qualitative results of the application of the mathematical model to a real industrial case.

Keywords

Supply chain management

Integrated planning

Furniture industry

Tactical decisions

Large scale optimization

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  Corresponding author. Address: Centre Interuniversitaire de Recherche sur les Réseaux d’Entreprise, la Logistique et le Transport (CIRRELT), Université Laval, Québec, Canada G1K7P4.

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