Three Stage Supply Chain Coordination and Profit Optimization of Agricultural Products in Bangladesh

Document Type: Original Article

Authors

1 Department of Mathematics, Dhaka University of Engineering and Technology, Gazipur-1707, Bangladesh

2 Department of Mathematics, Bangladesh University of Engineering and Technology, Dhaka-1000, Bangladesh

3 Department of Computer Science & Engineering University of South Asia Banani, Dhaka-1213, Bangladesh

Abstract

ABSTRACT
This research presents four different mathematical formulations for the coordination and three stage supply chain optimization of agricultural products in Bangladesh. In this analysis, we assumed that the producers-retailers-distributors are coordinated by mutually sharing their information. To developed a Mixed Integer Linear Programming (MILP) model and analyze the situation of insufficient production capacity for the producer as the reason for shortages. The producers will coverage these shortages by outsourcing, which decided very beginning of the SCN. This plays a very important role in deciding so as to mitigate these challenges and to extend the system performance and individual gain of the SCN. The coordinated mechanism among the members of the market players has been projected to realize the best answer. The SCN was modeled using a formulation in mixed integer linear programming (MILP) that maximizes the total profit and also to estimate the product distribution of different locations which satisfy most of the customer demand. The formulated MILP model were solved by a mathematical programming language (AMPL) and results obtained by appropriate solver MINOS. Numerical example with the sensitivity of several parameters has been deployed to validate the models. Results show that after coordination, the individual profits could be increased without any extra investment.

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