This article was downloaded by: [University of California Santa Cruz]

On: 22 November 2014, At: 03:07

Publisher: Taylor & Francis
Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer
House, 37-41 Mortimer Street, London W1T 3JH, UK

International Journal of Computer Integrated

Manufacturing
Publication details, including instructions for authors and subscription information:
http://www.tandfonline.com/loi/tcim20

A multi-criterion genetic algorithm for order

distribution in a demand driven supply chain
Felix TS Chan & SH Chung
a
Department of Industrial and Manufacturing Systems Engineering , The University of
Hong Kong , Pokfulam Road, Hong Kong, People's Republic of China E-mail:
Published online: 19 Feb 2007.

To cite this article: Felix TS Chan & SH Chung (2004) A multi-criterion genetic algorithm for order distribution in
a demand driven supply chain, International Journal of Computer Integrated Manufacturing, 17:4, 339-351, DOI:
10.1080/09511920310001617022

To link to this article: http://dx.doi.org/10.1080/09511920310001617022

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained
in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no
representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of
the Content. Any opinions and views expressed in this publication are the opinions and views of the authors,
and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied
upon and should be independently verified with primary sources of information. Taylor and Francis shall
not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other
liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or
arising out of the use of the Content.

This article may be used for research, teaching, and private study purposes. Any substantial or systematic
reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any
form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://
www.tandfonline.com/page/terms-and-conditions
 INT. J. COMPUTER INTEGRATED MANUFACTURING, JUNE 2004, VOL. 17, NO. 4, 339–351
A multi-criterion genetic algorithm for order
distribution in a demand driven supply chain
FELIX T. S. CHAN and S. H. CHUNG
Abstract. This paper develops a multi-criterion genetic
optimization procedure, specifically designed for solving
optimization problems in supply chain management. The
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014
proposed algorithm is discussed with an order distribution
problem in a demand driven supply chain network. It
combines the analytic hierarchy process (AHP) with genetic
algorithms. AHP is utilized to evaluate the fitness values of
chromosomes. The proposed algorithm allows decision-
makers to give weighting for criteria using a pair-wise
comparison approach. The numerical results obtained from
the proposed algorithm are compared with the one obtained
from the multi-objective mixed integer programming ap-
proach. The comparison shows that the proposed algorithm is
reliable and robust. In addition, it provides more control and
information for the decision-makers to gain a better insight of
the supply chain network.
1. Introduction
In supply chain management, optimization of multi-
criterion problems may usually be encountered by
decision-makers (DM), such as total costs, quality of
product, customer service level, inventory level, manu-
facturing lead times, resources utilization, number of
employees, material resources, etc. Each criterion may
be limited with some constraints, highly interrelated,
and influencing each other in nature. For instance, to
maximize the profit, minimize the total cost, and
maximize the quality are conflicting aims in practice.
The optimization complexity increases as supply chain
collaboration becomes more prevalent in today’s
business model. An organization not only optimizes
itself, but also collaborates with other organizations for
larger optimization planning.
Authors: Felix T. S. Chan and S. H. Chung, Department of Industrial and
Manufacturing Systems Engineering, The University of Hong Kong, Pokfulam
Road, Hong Kong, People’s Republic of China. e-mail: ftschan@hkucc.hku.hk
International Journal of Computer Integrated Manufacturing
ISSN 0951-192X print/ISSN 1362-3052 online # 2004 Taylor & Francis Ltd
http://www.tandf.co.uk/journals
DOI: 10.1080/09511920310001617022
Supply chain collaboration benefits include faster
customer responsiveness, an increment of flexibility for
changing market conditions, an improvement in
customer service and satisfaction, and more customer
retention (Cooke 1998, Stank et al. 1999, Horvath
2001). The first initiative of supply chain integration
can be dated back to 1992 when 14 trade association
sponsors created a group named the ‘Efficient Con-
sumer Response (ECR) Movement’ (Robins 1994,
Barratt and Oliveira 2001). Three years later, five
companies: the Benchmarking Partners, Warner-Lam-
bert, Wal-Mart Stores, SAP, and Manaugistics worked on
the Collaborative Planning, Forecasting and Replenish-
ment (CPFR) project. The project goals were to
improve the business in the area of forecast accuracy,
store in-stock percentage, total inventory (for the
retailer and manufacturer combined), and cost (Cooke
1998). CPFR attempts to bring organizations (retailer
and manufacturer) together to make joint plans,
including promotion sales, procurement, replenish-
ment, and logistics planning. Blair (1998) stated that
CPFR has won the support of organizations in the drug,
grocery, general merchandise, and apparel industries.
Stank et al. (1999) showed that there is a strong support
in utilizing automatic inventory replenishment in cross-
organizational collaboration.
Barratt and Oliveira (2001) indicated that two
significant barriers, encountered in the implementa-
tion of supply chain integration, are: (i) the lack of
visibility of true customer demand, and (ii) the
collaborative relationships in the area involved in joint
decision-making. Within a supply chain partnership,
traditional competitive barriers between supply chain
members are mitigated to create mutually beneficial
relationships (Maloni and Benton 1997). Donselaar et
al. (2001) suggested that inventory reduction could be
achieved through the use of advanced demand
information. A superior supply chain strategy is the
one that maximizes the values added by the internal
 340 F. T. S. Chan and S. H. Chung
activities while developing solid partnerships leading to
high value external activities (Lakhal et al. 2001). New
and Ramsay (1997) also stated that there is a danger of
unfair distribution of costs and benefits in practice. This
may be due to the inequality of power between the
organizations. Neuman and Samuels (1996) suggested
that fairly sharing the gains from the supply chain is
critical. Researchers have also investigated which
organization should be the central decision-maker to
decide part or all of the coordination decisions among
the collaborating organizations (Pfohl and Buse 2001).
Horvath (2001) suggested some fundamental
attributes of supply chain collaboration, including
open, low-cost connectivity, flexible, multimedia data
storage, systems and channel integration etc. Fourth
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014
party logistics (4PL) can provide a practical frame-
work for supply chain integration, and highlight
some characteristics of a central coordinator (UPS
Logistics Group 2001). Hoek and Chong (2001)
presented the idea of 4PL from the experiences of
UPS Worldwide Logistics. 4PL is a supply chain
service provider that participates in supply chain
coordination rather than in supply chain operational
services. The concept of Third-party Value-Added
Networks (Third-party VAN) also illustrates the idea
of a central coordinator. First, a buyer sends a
number of purchase orders (POs) to the third-party
VAN. Second, the third-party VAN then sorts those
received POs and transmits them to different
suppliers (Ballou 1999). However, there is not much
research focused on the orders’ distribution metho-
dology, which takes into consideration the problems
encountered in a supply chain.
Without randomness in behaviour and uncertain-
ties, and under a static and certainty condition, an
order distribution problem can be simplified as an
operations research problem such as resource alloca-
tion, transportation, or production. These problems
can be solved by linear programming, fractional
programming, or multi-objective linear fractional pro-
gramming (Chakraborty and Gupta 2002). Similarly,
genetic algorithms (GAs) are widely adapted by recent
researchers on solving these problems. Traditionally,
optimization of the total cost is the most concerned
factor. Hoek and Chong (2001) suggested that costs are
the traditional criterion in the development of logistics
services. In the supply chain, customer services are
more critical.
In the supply chain environment, there are many
decision factors that need to be considered. They are
highly interrelated and influence each other. Most of
the optimization tools that can only optimize one single
factor do so at the cost of other factors. A real
intelligent distribution algorithm, especially designed
for supply chain management, should be capable of
considering more than one single factor. In addition,
since different factors have different weightings in
various structures of the supply chain environment and
in different situations, consideration of weighting is also
critical.
The remainder of this paper is divided into the
following sections. Section 2 describes the problem
structure. Section 3 presents the optimization functions.
Section 4 discusses the proposed algorithm and section
5 analyses the optimization results. Finally, section 6
concludes.
Glossary
avg fn average fitness value of the pool,
avg. UC average utilization of capacity,
Cdij delivery unit cost for each unit of product
transported from manufacturer (i) to
customer (j),
CMi maximum capacity of supply per week for
Mi ,
Cui production unit cost for Mi,
Dij quantity of Dj allocated to Mi,
Dj demand from customer j,
EU equity on utilization ratios,
fn fitness value,
Lij delivery day for each unit of product
transported from manufacturer (i) to
customer (j),
mag fn magnified fitness value,
Mi manufacturer i,
MSE mean square error,
RA relative value in chromosome A,
RB relative value in chromosome B,
TC total cost,
TL total delivery lead times,
UCi utilization of capacity for Mi.
2. The problem structure
Consider a hypothetical two-layer demand driven
supply chain with three manufacturers Mi = {M1, M2,
M3}, and ten customers Dj = {D1, D2, . . . , D10}, in which
each customer will release one demand with a total of
ten orders. Each manufacturer is an individual organi-
zation, and they are coordinated/cooperate to imple-
ment supply chain collaboration (in a horizontal
manner). Suppose a central coordinator is introduced
between the customers and the manufacturers to
implement the integration part as shown in figure 1.
This central coordinator gathers the customer orders,
 A multi-criterion genetic algorithm
Figure 1. Central coordinator.
and then distributes them to the manufacturers. The
central coordinator is not a manufacturer in itself. It is a
unique and distinct community, which focuses on
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014
supply chain coordination tasks only. The objective is
to avoid bias for optimizing one’s own benefit and
encourage exerting more effort on the supply chain
collaboration. Meanwhile, this can strengthen the trust
of collaboration for the organizations participating in
the system. Products will be transported from manu-
facturers directly to customers, and the relative
distances from manufacturers to customers are shown
in table 1.
The problem encountered here is to determine
an optimal solution, which indicates the allocation
schedule of the customer orders to suitable manu-
facturers. Before an optimal solution can be deter-
mined, it is necessary to define what an optimal
solution is. Traditionally, cost is an important factor
to be considered. Therefore, the optimal solution
should give the lowest total cost for the system. Costs
in a supply chain involve production cost, material
cost, labour cost, inventory holding cost, storage cost,
delivery cost, quality control cost, loss and damage
cost, warranty cost, delay penalty cost, information
system cost, etc. In supply chain management nowa-
days, there is a trend to consider customer service
level as more critical (Hoek and Chong 2001).
Customer service level can be measured by customer
response time, ability to respond to market changes,
consistence of order cycle time, accuracy of order
fulfilment rate, short delivery time, flexibility in
order quantity, flexibility in product specification,
accuracy of information system, etc (Ballou 1999).
However, the critical optimization factors in the
implementation of supply chain collaboration do not
only minimize the total operation cost and maximize
the customer service level. It is crucial that the
coordinator should not be biased towards utilizing
some of the suppliers (manufacturers in this
example). This is because bias may incur the
supplier’s dissatisfaction of the collaboration and
disjoint. Therefore, a fair distribution of demands
341
Table 1. The relative distance from manufacturers to the
customers.
Delivery day D1 D2 . . Dj . . D10
M1 L1,1 L1,2 . . L1,j . . L1,10
M2 L2,1 L2,2 . . L2,j . . L2,10
M3 L3,1 L3,2 . . L3,j . . L3,10
becomes another crucial factor. The objective is to
secure the equity of sharing gains obtained from
collaborations in the chain. Similarly, this factor may
affect the cost factor and the service level factor
either positively or negatively.
Since those three criteria are conflicting in practice,
optimization of one of the criteria may sacrifice the
others. DMs are required to take a trade-off point for
those three factors. Some DMs may insist that the cost
factor should be slightly more/less important than the
service level factor by X times and the equity of
distribution factor by Y times. Meanwhile, the service
level factor should be more/less important than the
equity of distribution factor by Z times. Again, different
people will have different opinions on the weightings.
In addition, they may even have other new factors that
need to be considered in their situations. Indeed, an
optimal solution may be defined as a solution that has
taken the desired factors into account under a clear
declaration of the weighting relationship between those
desired factors.
For the sake of explaining the proposed algo-
rithm’s procedure, three major attributes are se-
lected – total cost, delivery days used, and equity of
utilization ratios. Considerations under each attribute
are simplified but representative. Total cost repre-
sents the cost attribute. It consists of production cost
and delivery cost. The attribute of the delivery days
used represents the customer service level. It is
calculated by the total number of days required to
deliver all the products to customers. A small total
number of days means the suppliers can deliver
products to the customers faster, implying good
customer service level. The equity of the utilization
ratios attribute represents the collaboration relation-
ship. It is evaluated by the comparison of the
manufacturer’s utilization. An equal/closely equal
percentage of utilization between each manufacturer
implies no bias in favouring a particular manufac-
turer.
Some assumptions for the hypothetical supply chain
can be stated as:
. Manufacturers can produce the same product
with equal quality.
 342 F. T. S. Chan and S. H. Chung

. Order quantities will not change after release 3.2. Total delivery days (TL)
from the customer.
. The delivery day used is accurate, no early arrival This indicates the number of days utilized for
or delay is allowed. delivery in the optimal solution determined. A small
. No loss and damage during delivery. value of total delivery days implies that products can be
. Inventory is available and ready for delivery as delivered in a short time, thus representing a better
order arrived. service level.
. Shortage or backorder is not allowed. P
. Production unit cost will not change with quantity TL = (delivery days from manufacturer to custo-
to produce. mer per unit production)
. Delivery cost will not change with the quantity to XX
delivery. = Dij Zij Lij : (3)
i j

3. Optimization functions
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014

3.3. Equity on utilization ratios (EU)

This hypothetical supply chain can be structured as
a multi-objective mixed integer programming (MO-
MIP) model. In this paper, the objective is to minimize
the total cost (TC) of the system, total delivery lead
times (TL), and equity of utilization ratios (EU).
Minimize Z ¼ TC þ TL þ EU :
The notations and equations utilized are shown as
the following.
This indicates the equity of the capacity
utilization ratio for manufacturers in the optimal
solution determined. The smaller the value, the
closer the capacity utilization ratio for every manu-
facturer, thus ensuring the demands are fairly
distributed.
X
Utilization of capacity for Mi ðUCi Þ ¼ Dij =Cmi : ð4Þ
j

Average utilization of capacity ðavg: UC Þ ¼

XX X
3.1. Costs
Dij = CMi ð5Þ
i j i
Total Cost (TC)
TC = Total production cost + Total delivery cost where CMi is the maximum capacity of supply.
XX XX EU is represented by mean square error (MSE).
= Dij Cui Zij þ Dij Cdij Zij : ð1Þ
i j i j
X
MSE ¼ ½ ðUCi  avg: UC Þ2 =n1=2 ð6Þ
Cui manufacturing cost required by Mi to produce i
one unit of product.
Dij quantity of Dj allocated to Mi. where n is the number of demands.
Zij 7 {0, 1} Zij = 1 if Dj is allocated to Mi, else = 0.

Delivery unit cost (Cdij) 3.4. Constraints

This is the delivery cost for each unit of product
transported from manufacturer (i ) to customer ( j ), 3.4.1. Demand allocation constraints. Total demand
allocated to all the manufacturers 4 Total capacity of
Cdij = delivery cost ratio 6 production unit cost 6 supply from all the manufacturers
delivery day XX X
= 0.2 CujLij. (2) Dij 4 CMi : ð7Þ
i j i

The delivery cost ratio varies from different types of

transportation, such as air to ship. Researchers reported Total demand allocated to a manufacturer 4 Max-
that logistics cost consumed an average 10.5% of the imum capacity of supply for that manufacturer
total sales for an organization (Ballou 1999). Therefore, X
in this paper, the delivery cost ratio will be set equal to Dij 4CMi ; 8i: ð8Þ
20% of the Cui. j
 A multi-criterion genetic algorithm 343

Total demand allocated to all the manufacturers to the other potential manufacturer. The advantages of
= total demand this quantity distribution can fully utilize the capacity of
XX X one manufacturer. A larger order quantity may often
Dij 4 Dj : ð9Þ result in the reduction of production cost, handling
i j j
cost, and delivery cost. The representation of the
splitting process is defined in the extended segment,
which has the number of genes equal to the number of
4. Proposed algorithm GA + AHP available manufacturers.
For instance, in a hypothetical network with five
4.1. Genetic algorithms manufacturers and five orders, the largest maximum
capacity of supply is M3, followed by M5, as shown in
In the proposed algorithm, optimal solutions are table 2(b). In this example, D2 exceeds the capacity of
generated by GA, in which AHP is used to calculate the M3. Then, D2 needs to be split into two orders. One of
fitness value of chromosomes. the orders consumes all the capacity of M3, and
another order will be checked for the need of further
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014

4.1.1. Representation of chromosome. Each chromosome
represents a potential optimal solution. In this paper, it
indicates which order should be supplied by which
manufacturer. A chromosome is composed of genes.
Each gene contains a value. In this distribution
algorithm, the value of a gene represents the manu-
facturer, and the location of the gene represents the
order number. For instance, gene 2 indicates that order
2 will be allocated to manufacturer 3 as shown in table
2(a).
4.1.2. Scheduling of chromosome. A chromosome con-
sists of a basic segment, and an extended segment. In
the basic segment, the number of genes is equal to the
number of total orders, as shown in table 2(a). If a
single order is larger than the largest capacity of supply
among the manufacturers, this order will be divided
into two individual orders. One order will be in the
quantity of the largest absolute capacity of the
manufacturer. The remaining quantity will be allocated
splitting. For example, if the remaining quantity is
found to be larger than the capacity of M5, further
splitting will progress. The maximum capacity of M5
will then be fully utilized. Again, the remaining
quantity will be checked for further splitting. If no
splitting is required, the remaining quantity will be
allocated randomly to any other manufacturer, such as
manufacturer 1.
4.1.3. Fitness value. The fitness value defines the
relative strength of a chromosome. It evaluates the
chromosome structure and returns a positive value. The
larger the value, the stronger the chromosome. A
strong chromosome means that it is more desirable.
The fitness value is guided by an equation. This
equation may formulate the total cost of the system,
and is considered by most researchers. Some research-
ers formulate the equation to optimize the total lead
times to increase the service level. In supply chain
management, it is crucial to consider the customer

Table 2. Representation chromosome structure.

(a) A sample of chromosome structure

Chromosome
:
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
<
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
8

M1 M3 M2 M3 M1
Position/Order 1 2 3 4 5

(b) A sample of chromosome structure with extended segment

Basic segment Extended segment for Order 2
:
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
<
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
8
:
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
<
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
8

M4 4 Max (M3). M2 M2 M1 *R (M1) E (M2) F (M3) E (M4) F (M5)

Gene Position 1 2 3 4 5 6 7 8 9 10

* R – remaining quantity
E – empty gene
F – fully utilized
 344 F. T. S. Chan and S. H. Chung
service level, meanwhile the costs should be considered
as well. In a situation such as supply chain cooperation,
equal distribution of benefits should never be ne-
glected. In this paper, an innovative measurement for
the fitness value calculation is proposed by introducing
AHP. This new approach for calculating the fitness
value will have the representations including the total
cost of the system, total delivery day utilized, and the
equality on manufacturer’s utilization ratio.
4.2. Analytic Hierarchy Process
AHP was developed by Saaty (1980). It is a well-
proven multi-attribute decision-making methodology,
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014
especially powerful for those complex problems with a
set of highly interrelated decision factors (Teltumbe
2000, Poh et al. 2001, Angelis and Lee 1996, Winkler
1990). With a pool of potential options, AHP helps to
determine which one is the most desirable. It can also
rank them from the most desirable to the most
undesirable. This makes AHP work perfectly in the
calculation of fitness values in GAs.
The principle of AHP is to organize the complex
problems into a hierarchy or a network structure. It
integrates all the criteria into a hierarchy of priorities.
These priorities and the structure used to represent the
problem influence the resulting decision. AHP needs
numbers (quantitative) and a modicum of mathematics
to formalize judgements and make tradeoffs (Saaty
1994). It also has the ability to determine which
objective factor outweighs the others. The ability to
assign weighting to different factors is another advan-
tage of AHP because it can take into account human
knowledge and experience in the decision-making
process.
The example problem in this paper can be
modelled into two hierarchy levels. The first level
represents all the attributes considered. The second
level represents the potential solutions, as shown in
figure 2.
One of the useful features of AHP is the weighting
of the attributes that can be declared by users, which
Figure 2. The hierarchy structure of the proposed algor-
ithm.
means human knowledge and experience can be
directly input into the system. Users can vary the
weightings according to their desires. Different from
simply giving weightings to each criterion, weightings
in AHP are in pair-wise comparison. That is, the
decision-maker can specifically compare attribute A to
attribute B and attribute C, and then specifically
compare the attribute of B to C. This weighting
approach allows much more detail on the weightings
for DM. These weightings provide guidelines for the
AHP to search and determine which potential solution
is the most optimal among all the options. For
instance, users may want an equal weighting on the
attribute of total cost and delivery day, and less
consideration for the utilization attribute, as shown
in table 3.
Each chromosome represents a potential solution,
and the corresponding values of total cost, total delivery
lead times, and capacity utilization of the manufacturer
can be evaluated. This evaluation process is examined
for all chromosomes in the pool. Before the numerical
process of the AHP, the values found are transformed
into relative cost, relative day, and relative utilization
values. These relative parameters are now defined
For total cost:
Relative cost =
Total cost of the chromosome
ð10Þ
Highest total cost of chromosome in the pool
For total delivery day:
Relative day =
Total delivery day of the chromosome
Longest total delivery day of chromosome in the pool
ð11Þ
For utilization:
Relative utilization =
MSE of the chromosome
ð12Þ
Highest MSE of chromosome in the pool
A smaller relative value implies that chromosome
behaviour is better in that attribute. These relative
values will be input for the matrix computation in the
second level. For instance, in a pool of three chromo-
Table 3. A sample of weightings in the attribute matrix.
Attribute matrix TC TL EU
TC 1 1 40
TL 1 1 40
EU 0.025 0.025 1
 A multi-criterion genetic algorithm
somes as shown in table 4(a), the relative values are
presented in table 4(b).
The weightings for attributes in the attribute
matrix are input by users. These weightings relate to
the importance of the attributes. Similarly, the
importance of chromosomes in respect of each
attribute should be related. The values of the
weighting are calculated according to equations (13)
and (14) as stated below.
Each chromosome is compared with all the other
chromosomes within the pool in a pair-by-pair ap-
proach. The relative values under the same attribute
will be compared. Considering two chromosomes A
(CA) and B (CB) in the relative cost values, if the
relative value in chromosome A (RA) is smaller than
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014
that in chromosome B (RB), it means chromosome A is
better (with a lower cost) than chromosome B. The
implication is that chromosome A should be weighted
more. Therefore, the value of weighting of CA to CB is:
Weighting of CA to CB ¼ RB  RA þ 1: ð13Þ
In contrast, if RA is larger than RB,
Weighting of CA to CB ¼ 1=ðRA  RB þ 1Þ: ð14Þ
The constant 1 in the equation serves two functions.
First it makes the weighting equal to 1 when RA equals
RB. Second, it forces the weighting to be larger than 1.
The AHP value evaluated will be the fitness value of
that chromosome in the pool. The larger the AHP value
returned, the more desirable the option. This is similar
to the scenario of fitness value; the larger the fitness
value obtained, the stronger the chromosome. This
means AHP works perfectly with GA. An example of
AHP to calculate the fitness values is shown in the
appendix.
Table 4. An example of relative values calculation.
(a) A sample of three chromosomes, with the values of cost,
day, and utilization
Chromosome Cost Day Utilization
1 6730 10000 5.744
2 6830 10000 2.52
3 10000 20000 10
(b) The relative values calculated from table 4(a)
Chromosome Rel. Cost Rel. Day Rel. Utilization
1 0.673 0.5 0.5744
2 0.683 0.5 0.252
3 1 1 1
345
4.3. Operators
4.3.1. Selection operator. The selection operator imple-
ments the idea of the ‘survival of the fittest’. It is the
process of selecting chromosomes from the pool to be
the parent chromosomes for the next crossover process.
This selection process is basically arbitrary. Every
chromosome may have a probability to be chosen.
However, the stronger the chromosome, the better the
chance that it will be selected. This mimics the idea of
only the strong surviving, while the weaker will be
eliminated. Indeed, every chromosome can appear
more than once in the mating pool as the parent
chromosome. The number of chromosomes selected is
equal to the pool size initially defined.
In this paper, an innovative process is introduced to
speed up the elimination process. The aim is to make
the pool mature faster; and to allow strong chromo-
somes having more chances to do the crossover to
become even stronger. The approach is to magnify the
fitness values of those chromosomes with a fitness value
above the average. On the other hand, for those
chromosomes which have their fitness values below the
average, their fitness values will be set equal to a
constant. This approach can ensure the strong chromo-
somes will be utilized more effectively. The fitness
values (fn) are converted into the corresponding
magnified fitness values (mag fn).
Average fitness value ðAvg fnÞ ¼
P
fn ð15Þ
Total number of chromosomes
. for those chromosomes with fn 4 Avg fn
ðmag fnÞk ¼ ½ðfnÞk  Avg fn  1000;
ð16Þ
k ¼ f1; 2; . . . ; ng
where n is the number of chromosomes with
fitness values higher than Avg fn.
. for those chromosomes with fn 4 Avg fn, their
fitness values will be set equal to a flat constant,
which is the smallest (mag fn) obtained from
equation (16).
Flat constant ¼ min fðmagÞ fnÞk g;
ð17Þ
k ¼ f1; 2; . . . ; ng:
4.3.2. Crossover operator. For this hypothetical model, it
adapts the multi-points crossover method. Because of
the length of the chromosome in this problem size, a
two-point crossover is adapted, which is 20% of the
genes undergoing crossover. This low percentage of
 346 F. T. S. Chan and S. H. Chung
crossover allows the chromosome to replace its weaker
genes gradually, and prevents the offspring chromo-
somes changing too rapidly from parent chromosomes.
The crossover operation is illustrated in figure 3(a).
4.3.3. Mutation operator. In this paper, the mutation of
chromosomes will occur only when a pair of chromo-
somes with an identical genes structure is selected to
crossover. Both of them will mutate instead of cross-
over. Similar to crossover, the number of mutated genes
is two, which is 20%. The mutation operation is
illustrated in figure 3(b).
4.3.4. Monitor operator. The idea of Elitist strategy is to
bring the best chromosomes from the previous stage to
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014
the present stage without changing the gene structure
(DeJong 1975). This ensures the best chromosomes can
survive. Onwubolu and Kumalo (2001) proposed an
‘Isbest strategy’, which ensures the best chromosomes
in the present stage are pushed into the next stage
(Onwubolu and Muting 2001). Meanwhile, the best
chromosomes are preserved, preventing loss of best
chromosomes. In this paper, the function of a monitor
operator serves to monitor the performance of the
evolution of the pool. After each evolution, the
strongest chromosomes in the present stage will be
identified and recorded. These strongest chromosomes
will be compared with the overall strongest chromo-
somes evaluated so far from the beginning. If these new
chromosomes are weaker than those overall strongest
chromosomes, the overall strongest chromosomes will
be inserted back into the mating pool for the crossover
or mutation processes. This allows the strongest
chromosomes to survive and have another chance to
become stronger. The number of insertions is set equal
Figure 3. Illustration of crossover and mutation operators.
(a) A sample of two-point crossover. (b) A sample of mutation.
to the rounded off integer of pool size divided by ten –
approximately 10% of the chromosomes in the pool will
be replaced. With this low percentage, the strongest
chromosomes can prevent domination in the mating
pool. When the number of strongest chromosomes is
larger than the number of calculated insertions, the
number of insertions will be set equal to the number of
strongest chromosomes. Again, this ensures the survival
of all the strongest chromosomes. The insertion will be
spread out evenly, i.e. each insertion will be separated
by a space that is equal to the number of insertions
calculated.
5. Computational results and discussions
The hypothetical supply chain presented in section
2 is optimized with the MOMIP by applying lexicogra-
phical goal programming. In order to minimize the
deviation from the optimal solution, the objective
function is modified and subject to additional con-
straints as shown in the following.
Minimize
Z ¼ aTC  þ b TL  þ gEU 
subject to
Z ¼ TC  TC þ þ TC 
l ¼ TL  TL þ þ TL 
m ¼ EU  EU þ þ EU 
where
a, b, g = importance weighting,
Z = optimal value of TC,
l = optimal value of TL,
m = optimal value of EU.
Ten sets of experiments are run with different
parameters generated randomly. The optimization
result is shown in table 5, with a, b and g = 1. In table
5(a), the objective function of TC is set as a hard
constraint, which means TC7= 0. TL and EU are soft
constraints, while TL is set as a hard constraint in table
5(b), and EU is a hard constraint in table 5(c).
The ten experiments have also been optimized by
GA + AHP. The number of evolutions adapted is 200
times with a pool size of 20. The importance weighting
of TC is heavy in table 5(a), TL weights heavy in table
5(b), and EU weights heavy in table 5(c). The
comparison of the optimization result indicates that
GA + AHP is reliable and robust.
 Table 5. Optimization results obtained by MOMIP.
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014

(a) TC as hard constraints.

TC Experiment 1 2 3 4 5 6 7 8 9 10

TC LP 2460 3590 3090 3090 3720 3750 4310 5236 3600 3632
GA + AHP 2460 3590 3090 3090 3720 3750 4310 5236 3600 3632
TL LP 15100 9500 6700 6700 13400 12400 10900 9800 13000 11200
GA + AHP 15100 9500 6700 6700 13400 12400 10900 9800 13000 11200
EQ LP 45.20 4.79 25.15 16.60 33.59 41.04 2.78 34.72 29.86 37.60

A multi-criterion genetic algorithm

GA + AHP 45.20 4.79 25.15 16.60 33.59 41.01 2.78 34.72 29.86 37.60

(b) TL as hard constraints.

TL Experiment 1 2 3 4 5 6 7 8 9 10

TC LP 4260 3750 3090 3090 4565 4358 4362 5236 5984 4536
GA + AHP 4260 3750 3090 3090 4565 4358 4362 5236 5984 4536
TL LP 6700 6700 6700 6700 6300 7400 7400 9200 9200 9100
GA + AHP 6700 6700 6700 6700 6300 7400 7400 9200 9200 9100
EQ LP 18.25 32.50 25.15 16.60 39.75 33.52 35.25 44.78 29.86 33.73
GA + AHP 18.25 32.50 25.15 16.60 39.75 33.52 35.25 44.78 29.86 33.73

(c) EU as hard constraints.

EQ Experiment 1 2 3 4 5 6 7 8 9 10

TC LP 3759 3660 3280 3220 4095 4115 4366 5300 4608 4096
GA + AHP 3759 3660 3280 3220 4095 4115 4366 5300 4608 4096
TL LP 8250 9500 9500 8500 9800 9200 10500 11000 11200 9900
GA + AHP 8250 9500 9500 8500 9800 9200 10500 11000 11200 9900
EQ LP 2.38 2.50 1.62 1.19 1.19 3.93 2.78 2.36 1.57 1.98
GA + AHP 2.38 2.50 1.62 1.19 1.19 3.93 2.78 2.36 1.57 1.98

347
 348 F. T. S. Chan and S. H. Chung
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014
Figure 4. Pareto solution obtained by MOMIP for experi-
ment 1. (a) Pareto solution of TC (MOMIP). (b) Pareto
solution of TL (MOMIP). (c) Pareto solution of EU
(MOMIP).
A set of Pareto solutions is determined for Experi-
ment 1, and plotted in figure 4. The characteristic of this
model is that the objective function of TC conflicts with
that of TL. The value of a is increasing from 1 to 50, while
b and g remain equal to 1. TC, TL, and EU are set as soft
constraints. In figure 4(a), TC reduces along with the
increased importance. Meanwhile, TL becomes longer as
shown in figure 4(b), and EU fluctuates as shown in figure
4(c). For the same model, a set of Pareto solutions is
determined by GA + AHP, and is plotted in figure 5.
Similarly, the importance weightings of TL and EU are set
to be equal, while the weighting of TC increases. These
graphs indicate that GA + AHP can also search the same
Pareto solution as the one obtained by LP.
Figure 5. Pareto solution obtained by GA + AHP for experi-
ment 1. (a) Pareto solution of TC (GA + AHP). (b) Pareto
solution of TL (GA + AHP). (c) Pareto solution of EU
(GA + AHP).
6. Conclusions
In supply chain management, many decisions usually
involve more than one criterion. Each criterion may be
limited by some constraints, and influence each other.
For instance, the cost and quality of a product may
conflict in nature. The supply chain collaboration
becomes more prevalent. The goals of collaboration
are to reduce the total cost of the supply chain and
increase the customer service level. Meanwhile, it is
crucial to maintain the collaboration relationship. An
intelligent distribution methodology should be capable
of determining an optimal solution, which can take into
account multi-criterion decision-making process. In
 A multi-criterion genetic algorithm 349

different situations, decision-makers may request differ-
ent weightings on the importance of those criteria in
their problems. For these purposes, this paper developed
a multi-criterion genetic algorithm, which combines the
optimization methodology of genetic algorithms (GAs)
with the decision-making technique of the analytic
hierarchy process (AHP). AHP is used to evaluate the
fitness values for chromosomes. The solution procedure
of the proposed algorithm is discussed with an example
problem of the order distribution problem. Through this
example, this paper illustrated the evolution processes of
optimal solution, i.e. selection, crossover, mutation, and
monitoring. The analytical results indicate the proposed
algorithm is robust and reliable.
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014
ONWUBOLU, G. C., and KUMALO, T., 2001, Optimization of
multipass turning operations with genetic algorithms. Inter-
national Journal of Production Research, 39(16), 3727–3745.
ONWUBOLU, G. C., and MUTING, M., 2001, Optimizing the
multiple constrained resources product mix problem using
genetic algorithms. International Journal of Production
Research, 39(9), 1897–1910.
PFOHL, H. C., and BUSE, H. P., 2001, Inter-organizational logistics
systems in flexible production networks. An organizational
capabilities perspective. International Journal of Physical
Distribution & Logistics Management, 30(5), 388–408.
POH, K. L., ANG, B. W., and BAI, F., 2001, A comparative analysis
of R&D project evaluation methods. R&D Management,
31(1), 63–75.
ROBINS, G., 1994, Sailing into ECR’s uncharted waters. Stores,
76(10), 43–44.
SAATY, T. L., 1980, The Analytic Hierarchy Process (New York:
McGraw-Hill).

SAATY, T. L., 1994, Fundamentals of Decision Making and Priority

References Theory with the Analytic Hierarchy Process (The Analytic
Hierarchy Process Series, 6).
ANGELIS, D. I., and LEE C. Y., 1996, Strategic investment analysis STANK, T. P., DAUGHERTY, P. J., and AUTRY, C. W., 1999,
using activity based costing concepts and analytical hier- Collaborative planning: supporting automatic replenish-
archy process techniques. International Journal of Production ment programs. Supply Chain Management: An International
Research, 34(3), 1331–1345. Journal, 4(2), 75–85.
BALLOU, R. H., 1999, Business Logistics Management, 4th edn TELTUMBE, A., 2000, A framework for evaluating ERP projects.
(Prentice Hall). International Journal of Production Research, 38(17), 4507–4520.
BARRATT, M., and OLIVEIRA, A., 2001, Exploring the experiences UPS LOGISTICS GROUP, 2001, United Parcel Service of America,
of collaborative planning initiatives. International Journal of Inc, http://www.upslogistics.com
Physical Distribution & Logistics Management, 31(4), 266–289. WINKLER L. R., 1990, Decision modeling and rational choice:
BLAIR, N., 1998, Minding the store: with inventory reduction AHP and utility theory. Management Science, 36(3), 247–275.
measures under way in the warehouse, executives are
eyeing similar strategies based on store-level data. Super-
market News, 48(3), 81–82.
CHAKRABORTY, M., and GUPTA, S., 2002, Fuzzy mathematical Appendix. Demonstration of AHP calculation for the
programming for multi objective linear fractional program- fitness values
ming problem. Fuzzy Sets and Systems, 125(3), 335–342.
COOKE, J. A., 1998, Into the great wide open. Logistics
Management and Distribution Report, 37(10), 84–87. For example, there are three chromosomes in the
DEJONG, K. A., 1975, An analysis of the behavior of a class of solution pool. The total cost, delivery days used, and the
genetic adaptive system. Doctoral dissertation, University of equity of utilization values are evaluated for those three
Michigan. chromosomes, as shown in table A1(a).
DONSELAAR, V. K., KOPCZAK, R. L., and WOUTERS, M., 2001, The
use of advance demand information in a project-based Table A1(a). A sample of three chromosomes.
supply chain. European Journal of Operational Research,
130(3), 519–538.
Chromosome Cost Day Utilization
HOEK, R. I. V., and CHONG, I., 2001, Epilogue: UPS logistics –
practical approaches to the e-supply chain. International
1 6730 10000 5.744
Journal of Physical Distribution & Logistics Management, 31(6),
2 6830 10000 2.52
463–468.
3 10000 20000 10
HORVATH, L, 2001, Collaboration: the key to value creation in
supply chain management. Supply Chain Management: An
International Journal, 6(5), 205–207.
LAKHAL, S., MARTEL, A., KETTANI, O., and ORAL, M., 2001, On the The relative values will be calculated as shown in
optimization of supply chain networking decisions. European table A1(b), where for instance (0.673 = 6370/10000).
Journal of Operational Research, 129(2), 259–270.
MALONI, J. M., and BENTON, W. C., 1997, Supply chain
partnerships: opportunities for operations research. Eur- Table A1(b). The relative values obtained from table A1(a).
opean Journal of Operational Research, 101(3) 419–429.
NEUMAN, J., and SAMUELS, C., 1996, Insights from industry supply Chromosome Rel. Cost Rel. Day Rel. Utilization
chain integration: vision or reality? Supply Chain Manage-
ment: An International Journal, 1(2), 7–10. 1 0.673 0.5 0.5744
NEW, S., and RAMSAY, J., 1997, A critical appraisal of aspects of 2 0.683 0.5 0.252
the lean chain approach. European Journal of Purchasing & 3 1 1 1
Supply Management, 3(2), 93–102.
 350 F. T. S. Chan and S. H. Chung

For instance, the decision-maker decides to use the behaves better than chromosome 1. According to
attributes weighting as shown in table A2. equation (16),
The chromosome matrixes under each attribute
are shown in tables A3(a)–(c), for attribute cost, Cell(1,3) = (0.68 7 0.67) 6 10 + 1
delivery days used, and equity on utilization respec- = 1.1.
tively.
On the other hand, according to equation (17),

Calculation of weighting under the attribute matrix Cell(3,1) = 1/[(0.68 7 0.67) 6 10 + 1]

For instance, under the cost attribute (table A3(a)),
the cell (1,3) with value 1.1 is calculated from the
equation (16). It is the comparison of the chromosome
1 and chromosome 2. Since chromosome 1 (0.68) is
larger than chromosome 2 (0.67), chromosome 2
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014
= 0.909091.
Finally, the AHP values can be calculated as shown
in table A4. These values will be the fitness values of
the chromosomes in the pool. According to the
results, it indicates that chromosome 1 (0.4168) is

Table A2. The attributes weighting.

(C) (D) (U) Normalized matrix RowS Average

Cost (C) 1 1 40 0.493827 0.493827 0.493827 1.481481 0.493827

Day (D) 1 1 40 0.493827 0.493827 0.493827 1.481481 0.493827
Uti (U) 0.025 0.025 1 0.012346 0.012346 0.012346 0.037037 0.012346
S 2.025 2.025 81

Table A3(a). The weighting under the cost attribute matrix.

C 1 2 3 Normalized matrix Row S Average

1 1 1.1 4.27 0.466574 0.470124 0.452331 1.389028 0.463009

2 0.909091 1 4.17 0.424158 0.427385 0.441737 1.293281 0.431094
3 0.234192 0.239808 1 0.109268 0.102491 0.105932 0.317691 0.105897
S 2.143283 2.339808 9.44

Table A3(b). The weighting under the delivery days used attribute matrix.

D 1 2 3 Normalized matrix Row S Average

1 1 1 1.5 0.375 0.375 0.375 1.125 0.375

2 1 1 1.5 0.375 0.375 0.375 1.125 0.375
3 0.666667 0.666667 1 0.25 0.25 0.25 0.75 0.25
S 2.666667 2.666667 4

Table A3(c). The weighting under the equity on utilization attribute matrix.

U 1 2 3 Normalized matrix Row S Average

1 1 0.236742 5.256 0.184697 0.174761 0.356678 0.716136 0.238712

2 4.224 1 8.48 0.780162 0.738189 0.575461 2.093812 0.697937
3 0.190259 0.117925 1 0.03514 0.087051 0.067861 0.190052 0.063351
S 5.414259 1.354667 14.736
 A multi-criterion genetic algorithm 351
Table A4. The AHP values calculated.

Objectives C D U AHP value

Weights 0.493827 0.493827 0.012346

Chromosome
1 0.463009 0.375 0.238712 0.4168
2 0.431094 0.375 0.697937 0.4067
3 0.105897 0.25 0.063351 0.1765

the strongest. The next strongest is chromosome 2
(0.4067), and the weakest one is chromosome 3
(0.1765). In this example, both the cost attribute
and delivery days used attributes are equally important
Downloaded by [University of California Santa Cruz] at 03:07 22 November 2014
utilization attribute. Therefore, although the equity on
utilization attribute of chromosome 2 is better than
chromosome 1 and only a little bit weaker than
chromosome 1 in the cost attribute, chromosome 1 is

and are weighted much heavier than the equity on still stronger than chromosome 2.