Module design with substitute parts and multiple vendors

In this paper, we present 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 miniml number of parts from each substitution group in each product. Also, life cycle demand must be met. We present an algorithm and a heuristic to solve the model. We include initial computational results that demonstrate that the heuristic performs well on the problems tested.