Integrating the Cost of Quality into Multi-Products Multi-Components Supply Chain Network Design

More than ever before the success of a company heavily depends on its supply chain and how efficient the network. A supply chain needs to be configured in such a manner as to minimize cost while still maintaining a good quality level to satisfy the end user and to be efficient, designing for the network and the whole chain is important. Including the cost of quality into the process of designing the network can be rewording and revealing. In this research the concept of cost of quality as a performance measure was integrated into the supply chain network designing process for a supply chain concerned with multi products multi components. This research discusses how this supply chain can be mathematically modeled, solutions for the resulted model and finally studied the effect of the inclusion of the quality as a parameter on the result of the deigning process. Nonlinear mixed integer mathematical model was developed for the problem and for solving the model two solutions based on Genetic algorithm and Tabu Search were developed and compared. The results and analysis show that the solution based on the Genetic algorithm outperforms the Tabu Search based solution especially in large size problems. In addition, the analysis showed that the inclusion of the cost of quality into the model effect the designing process and changes the resultant routes.