Including technology selection decisions in manufacturing network design models

This paper presents an optimization methodology to design a network of manufacturing facilities producing several products, with non-trivial bills of material, under deterministic demands. The mathematical programming model developed finds the optimal structure of the manufacturing network, it defines the mission of the selected facilities and it determines the technology and the capacity of each facility. The approach takes economies of scale and scope into account. The model is formulated, a solution method based on Bender's decomposition is derived and computational results are presented.