A tabu search heuristic for the outsourcing risk management problem in multi-echelon supply chains

Arian Nahangi and Mohamed Awwad

International Journal of Operational Research, 2024, vol. 50, issue 4, 490-520

Abstract: Globalisation has made supply chains more vulnerable to risk factors, increasing the associated costs of outsourcing goods. This paper considers a multi-echelon supply chain model with global and domestic raw material suppliers, manufacturing plants, warehouses, and markets. The problem is formulated as a mixed-integer linear programming model. Due to the NP-hard nature of the problem, a tabu search heuristic is proposed to solve small, medium, and large problem instances. A quadratic multi-regression analysis is used to analyse the performance of the proposed tabu search heuristic. The statistical analysis shows that increasing the number of iterations and neighbours will increase run time and reduce total supply chain cost. The proposed tabu search heuristic proved to provide an efficient solution, including large problem instances, in a timely manner.

Keywords: multi-echelon supply chain; risk management; outsourcing; tabu search; multi-regression. (search for similar items in EconPapers)
Date: 2024
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