Journal article
Formation of a strategic manufacturing and distribution network with transfer prices
European journal of operational research, Vol.241(2), pp.435-448
03/01/2015
DOI: 10.1016/j.ejor.2014.08.042
Abstract
We propose a profit maximization model for the decision support system of a firm that wishes to establish or rationalize a multinational manufacturing and distribution network to produce and deliver finished goods from sources to consumers. The model simultaneously evaluates all traditional location factors in a manufacturing and distribution network design problem and sets intra-firm transfer prices that take account of tax and exchange rate differentials between countries. Utilizing the generalized Benders decomposition approach, we exploit the partition between the product flow and the cash allocation (i.e., the pricing and revenue assignment) decisions in the supply chain to find near optimal model solutions. Our proposed profit maximizing strategic planning model produces intuitive results. We offer computational experiments to illustrate the potential valuable guidance the model can provide to a firm's supply chain design strategic planning process.
•Decision support model for location, production, shipping and pricing decision.•Intuitive and efficient decomposition procedure to solve the model.•Computational experiments to illustrate the potential valuable guidance the model can provide to a firm's supply chain design strategic planning process.
Details
- Title: Subtitle
- Formation of a strategic manufacturing and distribution network with transfer prices
- Creators
- Renato de Matta - University of IowaTan Miller - Rider University
- Resource Type
- Journal article
- Publication Details
- European journal of operational research, Vol.241(2), pp.435-448
- Publisher
- Elsevier B.V
- DOI
- 10.1016/j.ejor.2014.08.042
- ISSN
- 0377-2217
- eISSN
- 1872-6860
- Language
- English
- Date published
- 03/01/2015
- Academic Unit
- Business Analytics
- Record Identifier
- 9984380537902771
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