An Integrated Decision Making Model for Manufacturing Cell Formation and Supplier Selection

Optimization of the complete manufacturing and supply process has become a critical ingredient for gaining a competitive advantage. This article provides a unified mathematical framework for modeling manufacturing cell configuration and raw material supplier selection in a two-level supply chain network. The commonly used manufacturing design parameters along with supplier selection and a subcontracting approach are incorporated into our mathematical model. To the authors’ knowledge, there is no single model which integrates all of these attributes simultaneously. A sensitivity analysis is also performed to study the effects of this integration. An efficient meta-heuristic based on Genetic Algorithm (GA) search procedure is employed to effectively solve the model in medium and large scales. We improve the GA search mechanism by proper combination of linear programming optimization technique and GA in a cooperative framework. Computational results show that our hybrid solution technique can find satisfactory solutions in a timely manner.