The impact of the cost of quality on serial supply‐chain network design

Abstract

This paper presents a model for supply‐chain design that considers the Cost of Quality as well as the traditional manufacturing and distribution costs (SC‐COQ model). It includes three main contributions: (1) the SC‐COQ model internally computes quality costs for the whole supply chain considering the interdependencies among business entities, whereas previous works have assumed exogenously given Cost of Quality functions; (2) the SC‐COQ model can be used at a strategic planning level to design a logistic route that achieves a maximum profit while considering the overall quality level within a supply chain; and (3) we provide two solution methods based on simulated annealing and a genetic algorithm and perform computational experiments on test instances.

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