Supply chain optimisation with U-type assembly line balancing

In supply chain optimisation problems, determining the location and number of facilities is considered at a strategic level, while mid-term and short-term decisions such as those concerning assembly policy, inventory levels, lot sizes and scheduling are handled at the tactical and operational levels. However, considering these decisions simultaneously is almost always ignored during the optimisation of distribution/production processes. The aim of the study is to optimise the supply chain network (strategic level), including manufacturers, assemblers and customers, while simultaneously balancing the U-type assembly lines (tactical level) in assemblers. A nonlinear mixed integer mathematical model is proposed to minimise the total costs and the number of assembly stations while minimising the total fixed costs of stations. To show the validity and usefulness of the proposed model, a numerical example with different scenarios and sensitivity analyses is given and discussed.