A two step approach for the integrated production and distribution planning of a supply chain

Authors:
Ali Serdar Tasan
Affiliations:
Department of Industrial Engineering, Dokuz Eylul University, Bornova, Izmir, Turkey
Venue:
ICIC'06 Proceedings of the 2006 international conference on Intelligent Computing - Volume Part I
Year:
2006

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Abstract

Since the production and distribution planning is one of the most important activities to support the global optimization of supply chains, they must be considered in an integrated platform. Most of the integrated production-distribution models consider transportation with a fixed per unit cost, without routing or transportation capacity issues. The aim of this study is to develop an efficient methodology which provides cost savings in logistics activities by considering production, inventory and distribution decisions simultaneously. Generally, finding optimum solution for such an integrated problem is not easy due to its combinatorial nature, especially when vehicle routing is taken into account. Therefore, a two step solution methodology is proposed in order to cope with these issues.