A framework for an integrated distribution system optimisation model

Abstract

This paper presents a framework for an integrated optimisation model of supply chain functions in a multi-plant, multi-product, multi-customer supply chain with deterministic demands. A Mixed-Binary Integer Programming model is proposed to integrate the Capacitated Location, Production and Distribution (CLPD) functions within a supply chain. The integrated CLPD problem is formulated as a profit maximisation model with capacity and demand constraints. The result is a framework from which to design entire supply chains from suppliers to customers. The proposed model is solved using OPL Studio 3.7 and solutions for four variations of the CLPD problem are presented to demonstrate the efficacy of the integrated approach. The main contribution of this research is a multi echelon, supply chain design and modelling hierarchy. This study was motivated by a perceived gap in the literature on supply chain modelling methods and supply chain frameworks.