Production Planning & Control, 2014

Vol. 25, No. 5, 414–424, http://dx.doi.org/10.1080/09537287.2012.702865

Mathematical modelling to improve Rolled Throughput Yield in a supply chain

Abbas Saghaeia*, Hoorieh Najafib, Ali Mighic and Zeynab Mosannaa
a
Department of Industrial Engineering, Science and Research Branch, Islamic Azad University, Tehran, Iran;
b
Parsian Quality and Productivity Research Center, Tehran, Iran; cManagement School,
Science and Research Branch, Islamic Azad University, Tehran, Iran
(Received 7 August 2010; final version received 24 May 2012)

The outspread of supply chains competition entails inevitable application of quality improvement methods, such
as Six Sigma. It is less than a decade that Six Sigma methodology has entered the supply chain scope; however,
researches undertaken in this field have massively increased. Most of these research works have been done
towards the application of the Six Sigma method for supply chain improvement, yet nothing has been done about
suitable entity selection in supply chain for improvement. The purpose of this article is to propose a method for
individual entity selection in the supply chain. Accordingly, a mixed integer non-linear programming model is
presented that shows which supply chain entity should be selected, and how much to improve, in order to
maximise financial benefit. This article also presents new comprehensive criteria based on the previous approach,
which can measure the performance of the supply chain. Moreover, the ability of the proposed criteria is shown
through a numerical example. Finally, the optimisation model was applied for selecting individual entity in
tweedy supply chain in order to illustrate the capability of the model. In addition, sensitivity analysis is carried
out on the parameters of the model.
Keywords: supply chain management; Six Sigma; Rolled Throughput Yield; project selection; textile industry

1. Introduction Therefore, evaluative indicators of supply chain per-

In today’s challenging business environment, the
accelerated competition among companies has evolved
into a competition of supply chains. As a result, supply
chain management (SCM) has become an important
means for companies to gain competitive advantages
(Xu et al. 2008).
Supply chain management is one of the managerial
philosophies which has emerged in the late 1980s.
Global supply chain forum (GSCF) defines supply
chain management as follows:
‘Supply chain management is the integration of key
business processes from end user through original
suppliers that provides products, services, and infor-
mation that add value for customers and other
stakeholders’ (Lambert and Cooper 2000). In other
words, SCM focuses on the network of companies
instead of a single company (Kuo et al. 2010).
In recent years, the companies have realised that if
they want to preserve their share in competitive
market, they have to make an integrated relation
with the totality of supply chain and finally with the
customers in order to hear the customers’ voice and
present goods that can satisfy customers’ needs.
formance often focus on continuous improvement of
servicing customers. In fact, customer satisfaction is
one of the main goals of each supply chain (Fenies
et al. 2010). In Six Sigma too, the highest priority is
given to customers, as the criteria for Six Sigma
functionality starts with the customers, and Six Sigma
improvements are also defined according to the
amount of their effect on customer satisfaction.
In statistical terms, Six Sigma means 3.4 defects per
million opportunities (Furterer and Elshennawy 2005,
Tsou and Chen 2005, Lee and Choi 2006, Desai 2008).
Six Sigma methodology is a set of tools and statistical
methods for improving the capability of processes
which tends to solve organisational problems and
issues by traversing a cycle of stages including define,
measure, analyse, improve and control (DMAIC)
(Raisinghani 2005, Chen and Lyu 2009).
Today there is a high tendency for applying
indicators that can evaluate the performance of total
supply chain and its entities in the same scale
(Dasgupta 2003). Dasgupta believes that Six Sigma
criteria such as defect per million opportunity
(DPMO) and Rolled Throughput Yield (RTY) could

*Corresponding author. Email: a.saghaei@srbiau.ac.ir

ß 2012 Taylor & Francis

2 Production Planning & Control
be effectively applied in measuring supply chain
performance and its entities. Six Sigma indicators can
advantageously compare the capability of processes in
the same scale and without regard to their nature (Xu
2008).
Rolled throughput yield is one of the most practical
indicators, which compute the possibility of a defect-
free passage of a product from all sub-processes. This
indicator was traditionally used to evaluate the capa-
bility of series processes (Pyzdek 2003). In 1999, Graves
pointed out that RTY could also be estimated in parallel
processes. Recently, a statistics–mathematical model
was proposed to calculate RTY in organisation
(Saghaei et al. 2012). The aforesaid model estimates
the performance of an organisation considering factors,
such as the difference between scrap and rework cycles,
the cost of scrap and rework and the sequence of
stages. In the field of supply chain, RTY calculation
belongs to the simple model, which was proposed by
Dasgupta in 2003 and the details of which will be
explained through the following sections of this article.
One of the issues discussed in this article is to modify the
current method and introduce a more efficient indicator
for calculating supply chain performance; the ability of
this method will be shown through a numerical
example.
Besides the capability of Six Sigma criteria for
measuring supply chain performance, one of the
common features of Six Sigma and SCM is being
process-oriented which causes double motivation for
merging these two approaches (Harry 1997, La Lond
1997, Lambert et al. 1998, Ross 1998, Pande et al.
2000). Therefore, the application of Six Sigma in
supply chain has recently been extended. Most of the
research works undertaken show how to apply this
methodology in measuring, controlling and improving
supply chain (e.g. Garg et al. 2004, Wang et al. 2004,
Antony et al. 2006, Chan et al. 2006, Yang et al. 2007,
Chang and Wang 2008, Li et al. 2008, Franca et al.
2010, Kumar et al. 2010, Nabhani and Shokri 2010,
Wei et al. 2010). Yet, despite the developing applica-
tion of Six Sigma in SCM, little attention has been
given to selecting an entity in supply chain for
performance improvement.
Project selection is one of the effective factors in Six
Sigma successful implementation and important activ-
ities of define phase. Six Sigma project consists of
planning to solve a problem with different criteria.
Such criteria can be utilised as the goals of project and
can be analysed to develop a project. By reviewing the
literature in supply chain field, we can categorise them
into two groups: the traditional methods and tech-
niques which are often simple and have sometimes
been based on MCDM models, such as priority index,
415
Pareto, AHP, QFD, theory of constraints
(Pyzdek 2000, 2003), matrix assessment project
(Breyfogle et al. 2001), QFD (Pande et al. 2000),
project selection matrix (Kelly 2002), project ranking
matrix (Adams et al. 2003), pareto analysis (Larson
2003), reviewing data on potential projects against
speciEc criteria (De Feo and Barnard 2004) and AHP
(Dinesh Kumar et al. 2006). Moreover, the recent
research works which have presented the mathematical
modelling for Six Sigma project selection are as
mentioned below. Kahraman and Büyüközkan (2008)
have offered a weighted additive fuzzy goal program-
ming methodology model to choose the most appro-
priate Six Sigma projects. They have utilised the fuzzy
AHP model to obtain the weights of criteria such as
minimising the lead time of the project, maximise
Enancial beneEts, maximise process capability, maxi-
mise customer satisfaction, minimise cost and minimise
risk. Kumar et al. (2007) have employed DEA model
to recognise the outputs and inputs of Six Sigma
projects and consequently to select the most effective
project. In order to select the best Six Sigma projects,
Kumar et al. (2008) have proposed a non-linear binary
model based on the Taguchi function. Saghaei and
Didehkhani (2011) proposed a comprehensive meth-
odology to evaluate and select Six Sigma projects.
They designed hybrid models which are a combination
of fuzzy interface systems and neural networks. These
models can easily recognise interrelationships and non-
linear treats of criteria. The mentioned methods and
techniques are suitable for organisations. But the
supply chain consists of a set of interconnected
organisations and the projects defined include larger
dimensions. Hence, the supply chain improvement
requires a more accurate and complex modelling which
involves all entities of the supply chain.
A number of researchers in the field of supply chain
have tried to make use of classic optimisation methods
such as linear, non-linear, integer and mixed integer
programming as well as most recent methods such as
heuristic and meta-heuristic algorithms in order to
present models for optimising supply chain perfor-
mance (e.g. Gjerdrum et al. 2002, Lababidi et al. 2004,
Gheidar et al. 2009, Hsu and Li 2009, Mula et al. 2009,
El-Sayed et al. 2010, Yao 2011). However, none of
these research works have dealt with RTY or choice of
improvable points in supply chain network.
Considering the review on the previous research
works it can be concluded that the methods of project
selection are often applied in organisations and less
focus has been put on choosing the potential points of
improvement in the supply chain. Having more com-
plexities, implementation of the Six Sigma projects in
the supply chain is long-term project so it is worth
416 A. Saghaei et al.
designing more advanced mathematical techniques
and models. On the other hand, regarding the increas-
ing tendency to measure RTY indicator in the supply
chain, designing more comprehensive and accurate
models based on such an indicator has been of special
importance
The literature review shows that considering the
increasing use of Six Sigma in SCM, it is necessary to
find a method for proper selection of improvable items
in the supply chain. The main purpose of this article is
therefore to offer a method based on rolled throughput
yield indicator that can show which supply chain entity
should be improved, and to how much improve. Hence
in order to do so, a more comprehensive approach is
introduced for measuring RTY in supply chain. Then,
a mixed integer non-linear (MINLP) model will be
formulated based on the new criteria in order to
maximise financial benefit gained from improvement
for supply chain entity selection.
This article is organised as follows. The next section
explains an RTY calculation method in supply chain
Tier2 Tier1 Focal
Company
Focal Company Members of the Focal Company's supply chain
Figure 1. Supply chain network structure.
Source: Lambert et al. (1998).
3
and compares its effectiveness with the previous
method through a numerical example. In Section 3,
mathematical model formulation is discussed. Section
4 deals with the results of applying this model in textile
industry. Sensitivity analysis results are reported in
Section 5. Finally, Section 6 makes a conclusion and
suggestions for further studies.
2. RTY calculation in supply chain
In this section, a criterion for measuring performance
of a supply chain similar to Figure 1 is presented.
Then, a numerical example is presented to compare
this indicator with the previous method.
Figure 1 shows the structure of a supply chain
including two supplier and two customer tiers.
In 2003, Dasgupta suggested a framework for the
evaluation and improvement of supply chain perfor-
mance based on the rolled throughput yield (RTY)
indicator. This indicator is applicable to all processes
where the product needs rework, or when the provided
Tier1 Tier2
Managed Process Links
4 Production Planning & Control 417

service needs revision. Whenever there is a need for (a) 0.9 0.9 0.9

rework due to errors, a delay or unnecessary cost is 0.9

1 0.9 4 6
made. The original idea in these criteria is to identify
areas in which such wastes occur. 0.9 0.9
3
In this method, RTY is calculated according to the
following equation: 2 0.1 5
YY RTYclassic =0.53
RTYclassic ¼ pij , ð1Þ
i j
RTYproposed =0.6

where pij is the probability of a unit to pass the entity j (b) 0.9 0.9 0.9
of tier i defect free.
1 0.9 0.1
According to Equation (1), it is seen that RTYclassic 4 6
is obtained by multiplying the yield of supply chain 0.9
3 0.9
entities. Section 2.1 shows that this method loses its
practicality in some cases. 2 0.9 5
Therefore, a new indicator is introduced in accor-
RTYclassic =0.53
dance with this method which uses the Graves’ (1999)
suggestion for calculating the suppliers’ parallel entities RTYproposed = 0.65
performance, and the concept of conditional probabil-
ity for calculating the customers’ parallel entities Figure 2. Supply chain with different percentages of product
performance. Total supply chain performance in presentation.
Figure 1 would therefore be calculated by
lj
!
Y
k Y
Ps ¼ paj paji , ð2Þ 3. RTY improvement in the supply chain
j¼1 i¼1
In this section, a mixed integer non-linear mathemat-
! ical model for RTY improvement in supply chain will
X
m nj
X be introduced based on the index defined in Section 2.
Pc ¼ j pbj i pbji , ð3Þ
Maximising financial benefit is one of the main
j¼1 i¼1
goals of any supply chain (Chopra and Meindl 2001).
Therefore, the suggested model tends to select potential
RTYproposed ¼ Ps  pfc  Pc , ð4Þ
points of improvement which can gain maximum
where Ps is the suppliers performance, Pc is the financial benefit considering technological constraints
customers performance, paj and paji are the first and and the desired improvement rates at each section of a
second tier suppliers yield, pfc is the focal company supplier, focal company and customers. The binary
yield, pbj and pbji are the first and second tier variables of the mixed integer model indicate which
customers yield, and j and i are the rate of presented supply chain entity should be selected and non-integer
services or products to customers bj and bji , variables denote amount of improvement.
respectively. The model’s parameters and variables include:
Parameters
r The resulted revenue of one unit
2.1. Numerical example improvement in entity 
Let us assume that all individual entities of a supply c The cost of one unit improvement
chain are alike and equals 0.9. in entity 
In Figure 2(a) and (b), there can be observed two c0 Constant cost of entity 
different supply chains where the percentage of services improvement
or productions given to fourth and fifth entities is not P01 Ideal performance of suppliers
alike. It is clear that network 2(b) is more efficient P02 Ideal performance of focal
than 2(a). company
The classic RTY shows a similar performance in P03 Ideal performance of customers
both cases, whereas the proposed RTY can reveal the N Maximum number of selected
functional difference between the two chains. entities
418 A. Saghaei et al. 5

Decision variables Customers

d Improvement rate of entity  dbji  Mbji ybji , i ¼ 1, . . . , nj , ð12Þ

 dbj  Mbj ybj , j ¼ 1, . . . , m: ð13Þ

0, d ¼ 0,
y ¼
1, d 4 0, Entity selection number constraint:
where lj
! nj
!
Xk X X
m X
8 yaj þ yaji þ yfc þ yb j þ ybji  N,
< aj , aji ,
> if  is supplier, j¼1 i¼1 j¼1 i¼1
 ¼ fc, if  is focal company, ð14Þ
>
:
bj , bji , if  is customer:

According to the defined parameters and variables, yaj , yaji 2 f0, 1g i ¼ 1, . . . , lj , j ¼ 1, . . . , k, ð15Þ
we can formulate the mathematical model as follows:
yfc 2 f0, 1g, ð16Þ
Max financial benefit
(" lj
!
X k X ybj , ybji 2 f0, 1g i ¼ 1, . . . , nj , j ¼ 1, . . . , m, ð17Þ
¼ Max raj daj þ raji daji
j¼1 i¼1
!#
X
m nj
X daj , daji 2 ½0, 1 i ¼ 1, . . . , lj , j ¼ 1, . . . , k, ð18Þ
þ rfc dfc þ rbj dbj þ rbji dbji
j¼1 i¼1
" ! dfc 2 ½0, 1, ð19Þ
X
k lj 
X 
0 0
 ðcaj daj þ caj yaj Þ þ caji daji þ caji yaji
j¼1 i¼1 dbj , dbji 2 ½0, 1 i ¼ 1, . . . , nj , j ¼ 1, . . . , m, ð20Þ
 
þ cfc dfc þ c0afc yfc where
nj 
!#)
X
m X 
þ 0
ðcbj dbj þ cbj ybj Þ þ 0
cbji dbji þ cbji ybji , k, lj , m, nj , N 2 N,
j¼1 i¼1 paj , paji , pfc , pbj , pbji 2 ½0, 1,
ð5Þ
P01 , P02 , P03 2 ½0, 1,
subject to:
j , i 2 ½0, 1,
Improvement constraints:
" # Maji , Maj , Mfc , Mbji , Mbj 2 ½0, 1,
Yk lj
Y
ð paj þ daj Þ ð paji þ daji Þ  P01 , ð6Þ and sufficiently large:
j¼1 i¼1
The objective function (5) maximises the benefit of
  rolled throughput yield improvement in entire supply
pfc þ dfc  P02 , ð7Þ
chain which is defined as subtract cost from the gained
" nj
# revenue. Constraints (6)–(8) demonstrate that the
X
m X performance of suppliers, focal company and cus-
j ð pbj þ dbj Þ i ð pbji þ dbji Þ  P03 : ð8Þ
j¼1 i¼1 tomers should be at least P01 , P02 and P03 , respectively.
Actually, (6)–(8) are formulated based on the items of
Technological constraints: the proposed RTY (Ps , pfc , Pc Þ that are introduced in
Suppliers Section 2. Constraint sets (9)–(13) express the maxi-
daji  Maji yaji , i ¼ 1, . . . , lj : ð9Þ mum amount of improvement for each entity.
Constraint (14) is entity selection number constraint
in the network and shows that most of entities can be
daj  Maj yaj , j ¼ 1, . . . , k: ð10Þ
chosen for the performance increase. Constraint sets
Focal company (15)–(17) define the decision variables as 0–1 binary.
Constraint sets (18)–(20) explain each decision variable
dfc  Mfc yfc : ð11Þ of daj , daji , dfc , dbj and dbji as the element of [0, 1].
6 Production Planning & Control 419

4. Applying optimisation model on textile industry
Nowadays the performance improvement of supply
chain in textile and clothes industry has been greatly
taken into attention. Supply chain in textile industry is
often long, complex and with different entities. Hence,
accurate management in the improvement of supply
chain is of special importance (Bruce and Daly 2011).
Hence, a real example is presented here in order to
describe potentials and application of the proposed
model for supply chain entity selection for perfor-
mance improvement.
This case study is of a tweedy supply chain in textile
industry, as shown in Figure 3.
Tweedy spinning is one of the long fibres spinning
processes in textile industry which is used for convert-
ing fibres to spun thread. Considering the market
requirement, thread is often produced by combining
45% wool and 55% polyester. A large part of wool and
polyester fibres are imported. Polyester fibres that are
imported in the form of tow are processed to become
taps, and then they enter the spinning section along
with the imported wool and domestic products. Ten
per cent of the produced threads at the spinning section
are sold and the rest are transferred to knitting factory.
Fifty per cent of tweedy textures are also sold after
finishing and drying. Most part of tweedy texture
consumptions are for producing male and female
garments.
Half of tweedy textures are transferred to the
garments section and are used in sewing and then they
are released to the market.
The related data of this supply chain are shown in
Table 1. p is the yield of each entity in the supply
chain and M shows the maximum amount that each
entity can be improved. These two parameters were
evaluated by an expert group on supply. c , c0 and r
were extracted from the financial reports relating to the
supply chain and then they are modified.
Regarding the data provided in Table 1 and
Equations (2)–(4), the performance of suppliers, cus-
tomers and total supply chain would be 0.61, 0.55, and
0.25, respectively. By applying the model presented in
Section 3, we can determine which entity of the tweedy
supply chain should be improved in order to increase
total network RTY and maximise financial benefit.
Accordingly, we select maximum four individual enti-
ties of supply chain network in a way as to increase the
performance of each supplier, focal company (spin-
ning) and customers by at least 0.1 units.
Considering the data provided in Table 1, the
optimisation model would be formulated as in the
following:

Max ½20d1 þ 10d2 þ 40d3 þ 30d4 þ 50d5 þ 40d6
þ 30d7 þ 40d8 þ 30d9 þ 25d10 þ 25d11 
 ½ð15d1 þ 10y1 Þ þ ð3d2 þ 5y2 Þ þ ð4d3 þ 3y3 Þ
þ ð15d4 þ 10y4 Þ þ ð5d5 þ 3y5 Þ þ ð5d6 þ 3y6 Þ
þ ð7d7 þ 3y7 Þ þ ð9d8 þ 4y8 Þ þ ð7d9 þ 9y9 Þ

þ ð6d10 þ 3y10 Þ þ ð7d11 þ 3y11 Þ ,

0.5
Tow import Convert tow to taps Knitting Drying and finishing Garment sewing
(1) (2) (6) (8) (9)
0.9

Domestic production Spinning

(3) (5) 0.5

0.1 Tweedy sale Garment sale

Wool fiber import Thread sale
(10) (11)
(4) (7)

Figure 3. Tweedy supply chain.

Table 1. Data related to tweedy supply chain.

Entities of tweedy supply chain

1 2 3 4 5 6 7 8 9 10 11

p 0.9 0.95 0.8 0.9 0.75 0.8 0.8 0.85 0.8 0.8 0.9
c 15 3 4 15 5 5 6 9 7 6 7
c0 10 5 3 10 3 3 3 4 9 3 3
r 20 10 40 30 50 40 30 40 30 25 25
M 0.01 0.05 0.18 0.02 0.21 0.15 0.13 0.09 0.1 0.14 0.08
420 A. Saghaei et al. 7

subject to: The results reveal that if the yield of these entities
amount to 0.18, 0.21, 0.15 and 0.13, respectively, the
Improvement constraints:
optimal value of the objective function becomes 12.3
ð0:9 þ d1 Þð0:95 þ d2 Þð0:8 þ d3 Þð0:9 þ d4 Þ  0:71, and the total supply chain RTY increases to 0.21.
ð0:75 þ d5 Þ  0:85,

0:9 ð0:8 þ d6 Þð0:85 þ d8 Þ½0:5ð0:8 þ d9 Þð0:9 þ d11 Þ
 5. Sensitivity analysis
þ 0:5ð0:8 þ d10 
  In this section, one parameter is changed and others
þ 0:1 ð0:8 þ d7 Þ  0:65: are kept fixed for analysing each model parameter’s
effect on the objective function. Some of the model’s
Technological constraints:
parameters influenced the financial benefit trend sig-
Suppliers nificantly, as shown in Figures 4–7. The effects of r
and M are investigated by varying these values and
d1  0:01y1 , the results are given in Figures 4 and 5. These figures
d2  0:05y2 , show that increasing the values of r and
d3  0:18y3 , M ð ¼ 3, 5, 6 and7Þ leads to the increase of the
d4  0:02y4 : objective function.
Figures 6 and 7 illustrate that by increasing the
Focal company costs of ‘domestic production’, ‘spinning’, ‘knitting’
and ‘thread sale’, the objective function value declines.
d5  0:21y5 : The feasible interval of r3 , r5 , r6 , r7 , c07 and c7 is
Customers (1, 1). If c03 , c05 and c06 are between 1 and 15, the
optimal variables will not change. In addition, the
d6  0:15y6 , feasibility range of M3 and M5 is (0.14, 1). This range
d7  0:13y7 , is (0.08, 1), (0, 1), (1, 84), (1, 78Þ and (1, 113) for M6 ,
d8  0:09y8 , M7 , c3 , c5 and c6 , respectively.
d9  0:10y9 ,
d10  0:14y10 , 6. Conclusion
d11  0:08y11 : One of the main reasons for poor efficiency of supply
chains is the process stage loop due to quality
Project selection number constraint:
deficiency. Since the removal of quality problems
X
11 would lead to a considerable economy of time and
y  4, costs, it is considered an ideal opportunity for improv-
¼1 ing supply chain performance.
y 2 f0, 1g  ¼ 1, . . . , 11, Accordingly, the application of the Six Sigma
d 2 ½0, 1: method as a quality improvement approach has been
recently increased in supply chain management.
The MINLP was solved by LINGO, version 10.0 Despite extensive studies in this field, little attention
software. The optimal values of decision variables are has been given to proper individual entity selection for
shown in Table 2. According to the value of binary improvement, which is one of the most significant
variables, ‘domestic production’, ‘spinning’, ‘knitting’ stages in Six Sigma implementation. This article
and ‘thread sale’ are selected for improvement. attempts to propose a new approach towards

Table 2. Optimal solutions of model.

Entities of tweedy supply chain Optimal

financial Increased
1 2 3 4 5 6 7 8 9 10 11 benefit RTY

y 0 0 1 0 1 1 1 0 0 0 0
12.3 0.21
d 0 0 0.18 0 0.21 0.15 0.13 0 0 0 0
8 Production Planning & Control 421

Objective Function value

Objective Function value

(a) 15.00 (b) 20.00

15.00
10.00
10.00
5.00
5.00

0.00 0.00
32 34 36 38 40 42 44 46 48 50 42 44 46 48 50 52 54 56 58 60
r3 r5
Objective Function value

Objective Function value

(c) 15.00 (d) 14.00
13.50
10.00 13.00
12.50
12.00
5.00 11.50
11.00
0.00 10.50
32 34 36 38 40 42 44 46 48 50 22 24 26 28 30 32 34 36 38 40
r6 r7

Figure 4. Sensitivity analysis results for r .

Objective Function value

Objective Function value

(a) 15.00 (b) 20.00

15.00
10.00
10.00
5.00
5.00

0.00 0.00
0.14 0.15 0.16 0.17 0.18 0.19 0.2 0.21 0.22 0.23 0.17 0.18 0.19 0.2 0.21 0.22 0.23 0.24 0.25 0.26
M3 M5
(c) (d)
Objective Function value

Objective Function value

16.00 14.00
14.00 13.50
12.00
10.00 13.00
8.00 12.50
6.00 12.00
4.00
2.00 11.50
0.00 11.00
0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.2 0.09 0.1 0.11 0.12 0.13 0.14 0.15 0.16 0.17 0.18
M6 M7

Figure 5. Sensitivity analysis results for M .

organisation selection in supply chain in order to fill in selection and optimisation of financial benefit in
the current gap. supply chain.
Hence based on the concept of conditional prob- The optimisation model was then applied in a real
ability, a robust method for measuring the supply supply chain in textile industry. The case study
chain rolled throughput yield was introduced and then revealed that with regard to technologic constraints,
through a numerical example, the potentials of these this model can enable users to decide which supply
criteria and the previous method’s limitations were chain points require improvement, and how much
compared. Then, based on the new criteria, a mixed improvement is needed. Also, sensitivity analysis was
integer non-linear model was proposed for entity performed in order to illustrate the effect of
422 A. Saghaei et al. 9

Objective Function value

Objective Function value

(a) (b)
20.00 20.00
15.00 15.00
10.00 10.00
5.00 5.00
0.00 0.00
1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
c'3 c'5
Objective Function value

Objective Function value

(c) (d)
20.00 20.00
15.00 15.00
10.00 10.00
5.00 5.00
0.00 0.00
1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10
c'6 c'7

Figure 6. Sensitivity analysis results for C0  .

(a) 13.00 (b) 13.50

Objective Function value

Objective function value

12.50 13.00
12.00 12.50
12.00
11.50
11.50
11.00 11.00
10.50 10.50
10.00 10.00
1 2 3 4 5 6 7 8 9 10 2 3 4 5 6 7 8 9 10 11

c3 c5
(c) 13.00 (d) 13.00
Objective function value

Objective function value

12.80
12.50 12.60
12.40
12.00 12.20
11.50 12.00
11.80
11.00 11.60
11.40
10.50 11.20
2 3 4 5 6 7 8 9 10 11 3 4 5 6 7 8 9 10 11 12
c6 c7

Figure 7. Sensitivity analysis results for C .

parameters’ changes on the behaviour of the objective Notes on contributors

function. Abbas Saghaei is an Associate
This article illustrated the application of optimisa- Professor of Industrial Engineering
tion model for improving rolled throughput yield Department at Islamic Azad
(as one of the Six Sigma indicators) in supply chain. University, Science and Research
branch. He received his PhD in
This mathematical programming can be used for any Industrial Engineering from Iran
improvement tools and techniques. University of Science and
Moreover, it is possible to expand the model Technology. He holds a BS
constraints regarding supply chain strategies, and degree and an MS degree in Industrial
replace other criteria for optimisation than financial Engineering. His research interests include Six Sigma, statis-
benefit or rather formulate a multi-objective model for tical process control, statistical learning and optimisation.
He is a member of the board of the Iranian Quality
the project selection in supply chain.
10 Production Planning & Control
Management Society. He is a senior member of the American
Society for Quality and also a certified six sigma master
black belt.
Hoorieh Najafi is an MS student
at the Department of Industrial
Engineering, Islamic Azad
University, Science and Research
branch. She received her BS degree
in Mathematics from Tehran Teacher
Training University. Her research
interests include Six Sigma and pro-
cess improvement.
Ali Mighi is a Director of
Development Office of Management
and Administrative Reform in Great
Tehran Electrical Distribution Co.
He is a member of the Iranian
Productivity Society. He is an MS
student at the Department of
Executive Management, Islamic
Azad University, Science and
Research branch.
Zeynab Mosanna is an MS student
at the Department of Industrial
Engineering, Islamic Azad
University, Science and Research
branch. She has a Mathematics BS
degree from Tehran Teacher Training
University. Her research interests
include Six Sigma and Statistical
Process Control.
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