Results of Profit Maximization Model

The single objective MILP model to maximize profits comprised of three stages  

Stage 1 Determine the ability of the company to fulfill present and projected sales, based on the current supply chain network. 

Stage 2 Evaluate how the company s ability would be improved, considering the potential expansions of plants and DCs in the current supply chain. Stage 3 Optimize the global supply chain network that would deliver the best results for the entire 5 year time horizon. 

The MILP model had 7000 constraints and a total of 7500 variables with 300 binary variables. The mathematical model was coded in ILOG and solved using the CPLEX solver (www.ILOG.com). The solver reached optimality in 2 min. 

The stage 1 analysis showed that the capacities of the existing facilities were utilized completely under current demand levels. However, considering projected future demand, the results showed that the existing supply chain could fulfill only 75% of the total projected demand, primarily restricted by production and distribution capacities. 

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