Journal of the Operational Research Society

, Volume 62, Issue 10, pp 1784–1795

Strategic design of competing supply chain networks for inelastic demand


  • S Rezapour
    • Amirkabir University of Technology
    • Amirkabir University of Technology
  • T Drezner
    • California State University-Fullerton
General Paper

DOI: 10.1057/jors.2010.146

Cite this article as:
Rezapour, S., Zanjirani Farahani, R. & Drezner, T. J Oper Res Soc (2011) 62: 1784. doi:10.1057/jors.2010.146


A model for designing the network of a new entrant supply chain under inelastic demand and in the presence of pre-existing competing chains is proposed. These supply chains provide an identical product for a market area. The model considers the location of distribution centres and retail outlets on a discrete set of potential locations. The assumptions of the model are: (1) static competition between the new and pre-existing chains and (2) a probabilistic customer behaviour based on an attraction function depending on both the location and the quality of the retailers. This model also incorporates the impact of the facilities’ location decisions on the operational inventory and shipment decisions. The resulting model is formulated as a mixed integer non-linear programme (MINLP). To solve the MINLP it is transformed to a linear one. We illustrate the model, discuss the results of a real-world case, and investigate the effectiveness of the proposed algorithm using randomly generated examples.


supply chainsnetwork designmixed integer non-linear programmingstatic competition

Copyright information

© Operational Research Society 2010