The Effects of the Size of Decision -making Units on Allocating Fixed Costs in Supply Chains

Document Type : Original Article

Authors

Department of Mathematics, Science and Research Branch, Islamic Azad University, Tehran, Iran.

Abstract

In the modern world, the effective and successful management of supply chains is among the most significant strategies in all organizations and public/private companies. Nowadays, recommending new tools and attitudes to improve the efficiency of supply chains that is a challenging topic in the management of organizations. Another important goal of organizational management is to allocate the costs logically and conveniently. the present study aimed to investigate the allocation of fixed costs in four-level supply chains by DEA models. The proposed model was investigated by implementing the common set of weight and cost allocation according to the size of the decision-making unit. Also, the goal programming technique has been applied for minimizing deviation between efficient allocation and size-based allocation.

The proposed model is a linear model that provides a unique fixed allocation for each of the stages of the supply chain. Also, considering that this model is always feasible, it can always be an optimal allocation for each of the stages of the supply chain in different industries. Also, considering that this model is always feasible, therefore, an optimal allocation can always be provided for each stage of the supply chain in different industries. In this paper, we focused on the allocation of personnel costs of a cement supply chain in Iran.The results show that the amount of allocation to the customer stage (fourth stage) of the supply chain is much higher than other stages and the lowest amount of allocation is obtained in the supplier stage (first stage).

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