A chance constrained fuzzy goal programming approach for perishable pharmaceutical supply chain network design

Abstract

In this paper, a bi-objective mixed-integer linear programming model is formulated for designing a perishable pharmaceutical supply chain network under demand uncertainty. The objectives of the proposed model are to simultaneously minimize the total cost of the network and lost demand amount. The proposed model is multi-product and multi-period and includes simultaneous facilities location, vehicle routing, and inventory management; hence, it is considered an operational-strategic model. Procurement discounts, the lifetime of products, storing products for future periods, lost demand, and soft and hard time windows are the main assumptions of the proposed model. A novel hybrid approach, based on fuzzy theory, chance constrained programming, and goal programming approach, is developed for solving the proposed bi-objective model. The validity of the proposed model and developed solution approach is evaluated using data from Avonex, a prefilled syringe distribution chain serving 11 health centers in Tehran. The proposed model indicates that some lost sales exist, and to overcome the lost sales, the case company needs to invest a little more in addition to the initial investment of around 2 billion tomans. The results obtained from implementing the model and the sensitivity analysis, using real-world data, confirm the efficiency and validity of the proposed mathematical model and solution approach.