The problem of the optimal three-level location allocation of transfer center, processing factory and distribution center for supply chain network under uncertain transportation cost and customer demand are studied. We establish a two-stage fuzzy 0-1 mixed integer optimization model, by considering the uncertainty of the supply chain. Given the complexity of the model, this paper proposes a modified hybrid second order particle swarm optimization algorithm (MHSO-PSO) to solve the resulting model, yielding the optimal location and maximal expected return of supply chain simultaneously. A case study of clothing supply chain in Shanghai of China is then presented to investigate the specific influence of uncertainties on the transfer center, clothing factory and distribution center three-level location. Moreover, we compare the MHSO-PSO with hybrid particle swarm optimization algorithm and hybrid genetic algorithm, to validate the proposed algorithm based on the computational time and the convergence rate.
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