Analysis of Supply Chain Network Design Model with Quality Cost
Abstract— Designing the supply chain network model that takes into account product quality could be one
of the most key factors that significantly improve the performance of organizations and also affects the most
customer satisfaction in a long-term period. However, this model is based on a single product and a single
production stage. This paper aims at designing a three-echelon supply chain model including multiple
suppliers, multiple manufacturers with multi-stages inspection, and multiple customers. The mathematical
problem is formulated with Cost of Quality (COQ) integrated into Supply Chain Network Design (SCND) to
minimize the total supply chain cost involving transportation costs and production costs. Further, the paper
proposes a meta-heuristic called Particle Swarm Optimization algorithm used to solve the model for the
supply chain lot size and sampling inspection strategy. From the numerical data of the case study, the
developed technique can determine the minimum of total supply chain cost at quality inspection 30.95%.
Index Terms— Supply Chain Network Design, Quality Cost, Cost of Quality, COQ, PSO algorithm
Worrasete Tansurat, Wichai Chattinnawat
Department of Industrial Engineering, Faculty of Engineering, THAILAND
Cite: Worrasete Tansurat, Wichai Chattinnawat, "Analysis of Supply Chain Network Design Model with Quality Cost," Proceedings of 2019 the 9th International Workshop on Computer Science and Engineering, pp. 565-572, Hong Kong, 15-17 June, 2019.