Concurrent design of product family and supply chain network considering quality and price

• Published in: Transportation research. Part E, Logistics and transportation review Vol. 81; pp. 18 - 35
• Main Authors: Rezapour, Shabnam, Hassani, Ashkan, Farahani, Reza Zanjirani
• Format: Journal Article
• Language: English
• Published: Exeter Elsevier India Pvt Ltd 01-09-2015; Elsevier Sequoia S.A
• Subjects: Concurrent design; Customers; Logistics; Mass customization; Mathematical models; Mathematical programming; Networks; Prices; Priorities; Product configuration design; Product design; Product family; Product lines; Product quality; Programming; Quality and price; Studies; Supply chain management; Supply chains; Transportation; Product family; Mass customization; Product configuration design; Quality and price; Concurrent design
• ISSN: 1366-5545; 1878-5794
• DOI: 10.1016/j.tre.2015.05.013

•The problem of concurrent design of a product family and its supply chain network is introduced.•Two extreme groups of customers are considered: looking for products with either higher quality or cheaper.•Two types of formulations are suggested for the problem.•A sensitivity analysis is performed to demonstrate trade-off between quality and price in the markets.•The model is analyzed and discussed through several numerical examples and case problem.
We study the problem of concurrent design of a product family and its supply chain (SC) network. Inspired by a real-life case in computer industry, the impact of quality and price in SC demand is investigated. Two different models are proposed, the former maximizes the company’s profit with respect to customers’ priorities on quality and price; the latter is a bi-objective programming, which consider two extreme customer groups: for one group quality has the highest priority and for the other price; the intermediate groups falls between these two. The performance of the models is analyzed through a case problem.