Capacitated plant selection in a decentralized manufacturing environment: A bilevel optimization approach |
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| Institution: | 1. CIRRELT - Interuniversity Research Centre on Enterprise Networks, Logistics and Transportation, Université de Montréal, P.O. Box 6128, Station Centre-Ville, Montréal H3C 3J7, Canada;2. School of Management, Université du Québec à Montréal, P.O. Box 8888, Station Centre-Ville, Montréal H3C 3P8, Canada;3. Department of Mathematics and Industrial Engineering, École Polytechnique de Montréal, P.O. Box 6079, Station Centre-ville, Montréal H3C 3A7, Canada;1. Area de Estadística e Investigación Operativa, Universidad Rey Juan Carlos, Móstoles (Madrid), Spain;2. Centro de Investigación Operativa, Universidad Miguel Hernández de Elche, Elche, Alicante, Spain;3. Dpto. de Estadística e Investigación Operativa, Universidad de Cádiz, Cádiz, Spain |
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| Abstract: | Most facility selection and production planning approaches assume centralized decision making using monolithic models. In this paper, we address a capacitated plant selection problem in a decentralized manufacturing environment where the principal firm and the auxiliary plants operate independently in an organizational hierarchy. A non-monolithic model is developed for plant selection in the decentralized decision making process. The developed model considers the independence relationship between the principal firm and the selected plants. It also takes into account the opportunity costs of over-setting production capacities in the opened plants. The developed mathematical programming model is a two-level nonlinear programming model with integer and continuous decision variables. It was transformed into an equivalent single level model, linearized and solved by available optimization software. Computational examples are presented. |
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