Abstract
Abstract In spite of the importance of effcient supply chain cooperation, planning in production and transportation are still conducted separately today. This paper presents a model that simultaneously creates lot-based plans for both production and transportation. It is assumed that transports are organized as milk runs, i.e. one truck stops at several suppliers before heading to the buyer. The integration of production planning and inbound logistics tour planning into a dynamic model has not been studied before. After a brief review of literature on integrated planning models, requirements for a model that is able to solve the outlined problem are given. A mathematical model is formulated along with a heuristic which is necessary because the model combines production planning and vehicle routing which are both computationally intensive problems and thus not mathematically solvable in acceptable time. Results show that supply chain-wide costs can be reduced with the help of the presented algorithm. Some comments on the applicability in practice and the need for further research are given in an outlook.
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