Module design with substitute parts and multiple vendors

This paper presents a model to design a single standard module when many parts can satisfy a particular technical requirement and parts may be purchased from a variety of vendors. The model attempts to minimize the total fixed costs for using vendors and parts, and the total variable costs for parts. Technical requirements for the set of products are modeled by requiring a minimal number of parts from each substitution group in each product. Also, life cycle demand must be met. The paper presents an algorithm and a heuristic to solve the model. It includes initial computational results that demonstrate that the heuristic performs well on the problem tested.