Distribution system optimization in the field of cosmetic products: A case study

Abstract

Considering the importance of distributing and selling products through various channels and their different costs, choosing a distribution channel and planning and controlling their operations in order to serve customers is a very important and high efficient affair. Regarding a generalized allocation model, this article has attempted to present a new type of distribution system in the supply chain, so that each one of the distributors can focus more on the retailers and prevent the conflict between distribution channels. A nonlinear multi-purpose mixed-integer programming model with a robust optimization approach has been considered, so that while minimizing distribution costs, the allocation ratio of orders to retailers was also maximized. In the phase of solving the designed model, at first the initial nonlinear model was converted into a linear model and as the model was multi-purpose, the metric LP method has been used for solving small dimensions. Then, to reinforce the model against uncertain parameter changes, the model has been reinforced by considering the demand as an uncertain parameter. The integrated QFD/AHP approach has also been used to evaluate and rank distribution methods, taking into account the important characteristics of the distributors and the retailers' desired criteria regarding distributors.