Supply Chain Network Design and Tactical Planning in the Dimension Stone Industry

A dimension stone supply chain has certain unique characteristics despite having many similarities to a typical manufacturing/processing industry supply chain. Examples of these characteristics include the multitude of dimension stone varieties dispersed over large geographical regions, variable raw dimension stone sizes due to the varying rock deposit quality, and variability in physical stone properties among different varieties. The hardness, texture, fracture, cleavage, and chemical composition vary between dimension stones of different varieties. These unique characteristics produce multidimensional complexity in modelling different processes from the rock excavation stage to the retail store stage. In this research, a dimension stone supply chain is analyzed from strategic and tactical perspectives that address the issues of supply chain network design and production planning. This research reflects the specific characteristics of a dimension stone supply chain that differentiate it from other mineral commodity supply chains. A Mixed Integer Linear Programming (MILP) based formulation is proposed to model the capacitated facility location problem to aid in the supply chain network design, and a linear programming-based model is proposed to address material transformation related supply chain process issues to facilitate medium-term tactical planning. Detailed numerical analyses are also presented to illustrate the proposed mathematical models.