Multi-objective Optimization for LCD Supplier Hub Operations(Theory and Methodology)

Abstract

This paper evaluates the performance of a supplier hub which supplies key components to neighboring manufacturers. The system is proposed by a third-party logistics provider that imports, stores and delivers glass panels on behalf of an international supplier. Under an information-sharing initiative, the hub can access inventory information of two major manufacturers and is responsible for making all replenishment decisions for the supplier. To evaluate the new proposal, we develop a multi-objective swarm optimization algorithm incorporating a simulation program and Kriging forecasts to identify non-dominated solutions that constitute the trade-off curve between fill rate and total inventory. Results suggest that the information-sharing initiative dominates existing operations if manufacturers prefer a very high fill rate or delivery times from the supplier to the hub are long.