Reliable cross-docking location problem under the risk of disruptions

This paper seeks to develop a reliable network of cross-docks by taking in to account disruption and reliability issues to hedge against heterogeneous risk of cross-docking failure. In real environments, applying a recovery policy can be a feasible strategy to handle disruptions. Hence, in this study, a recovery policy has been addressed in the form of reallocating suppliers to alternative cross-docks or altering the transportation strategy to move shipments. In addition to cross-dock location design, the optimum capacity of opened cross-docks will be determined considering the loads that will be served by each cross-docking center under regular and disruption conditions. A mixed integer nonlinear programming formulation is presented for the problem and is then linearized to present an efficient model. In order to solve it, two Lagrangian relaxation algorithms are designed and tested on 40 problem instances with different values of parameters. The results achieved by GAMS/CPLEX are compared with those of two algorithms and some analyses are performed on the solutions. Moreover, as the case study, the focus has been placed on logistic part of a car-manufacturing company with a vast supply chain network, containing more than 600 suppliers. The logistic strategies have been applied in order to reduce the transportation cost through the supply chain network and diminish the disruption subsequences in such a network. Based on the results, some managerial recommendations are presented.