Using Lingo to Optimize the Supply Network Cost

Gamal Nawara, Mohamed Mansour, Ghada Mohamed


This paper concerns the supply network cost as an optimization problem to decide its production strategy. The network consists of some nodes and arcs to represent the Bill of Materials of a finished product. Raw materials, subassemblies, and final assembly are a three-level supply network with a deterministic production lead time to assemble the finished product. The two options of production strategy are Make-to-Stock or Make-to-Order. The objective function is the minimization of supply network cost according to the selected strategy. To solve this problem, Lingo is used which is developed by Lindo system. A binary linear programming is developed by Lingo to decide the production strategy for each node in supply network with a minimum cost. The constraints are the delivery time which must be satisfied, and the limited capacity. A numerical example is conducted to show the result of the Lingo model.   


Make-to-Stock; Make-to-Order; Hybrid; Critical Path Method; Supply network cost.

Full Text:



D. Gupta and S. Benjaafar. “Make-to-order, Make-to-stock, or Delay Product Differentiation? A Common Framework for Modeling and Analysis.”, IIE Transactions, vol. 36, pp. 529–546, 2004.

X. Y. Sun, P. Ji, L. Y. Sun, and Y. L. Wang. “Positioning Multiple Decoupling Points in a Supply Network.” The International Journal of Production Economics, vol.113, pp. 946- 956, 2008.

Morash and E. A. “Supply Chain Strategies, Capabilities, and Performance.” Transportation Journal, vol.41 (1), pp. 37-54, 2001.

R. Mason-Jones, B. Naylor, and D. R. Towill. “Engineering the Leagile Supply Chain.” International Journal of Agile Management Systems, vol. 2 (1), pp. 54–61, 2000.

L.R. Shaffer, J.B. Ritter, and W.L. Meyer. The Critical Path Method. New York: McGraw-Hill, 1965.

L. King Peter. (2011). Crack the Code.

H.E. Scarf. “Inventory Theory.” The Journal of Operation Research, vol. 50(1), pp.1-50,2002.

“Lingo the modeling language and optimizer", 1415 North Dayton Street Chicago, Illinois 60642

Technical Support: (312) 988-9421 E-mail: WWW:


  • There are currently no refbacks.




About ASRJETS | Privacy PolicyTerms & Conditions | Contact Us | DisclaimerFAQs 

ASRJETS is published by (GSSRR).