Joint optimization of product family design and supplier selection under multinomial logit consumer choice rule

Abstract

In traditional product development process, supplier selection is performed in the production stage when the product design stage has finished. Recently, some scholars found that decoupling the supplier selection and product design may lead to infeasible or suboptimal solutions, and a number of research papers proposed methods integrating supplier selection into product family design. In this research, a one-step product family optimization model integrating supplier selection decision is established based on multinomial logit consumer choice rule. As a kind of widely used discrete choice model, multinomial logit consumer choice rule is regarded to be more flexible and suitable to formulate consumer choice behavior. Genetic algorithm is developed to solve the established nonlinear optimization model. The optimization result under multinomial logit rule is compared with that under the deterministic choice rule in the case study and sensitivity analysis of the model is performed.