A MILP Model for Reusable Containers Management in Automotive Plastic Components Supply Chain

Abstract

The automotive sector operates under the just-in-time (JIT) approach, but variations in demand mean that first-tier suppliers generate an accumulation of stocks at second-tier suppliers. Second-tier suppliers have a limitation of storage space, reason to limit their production to the size of the warehouse, but always attending the first-tier demand plan. A further limitation of the second-tier supplier is the number of empty reusable containers that the first-tier supplier delivers to the second-tier supplier and that are used to package the injected plastic components. The reusable filled containers are returned to the first-tier supplier, according to the plastic components demand plan. Thus, a closed-loop logistic is carried out between first and second-tier suppliers. This study proposes, from the second-tier perspective, a mixed integer linear programming (MILP) model for fleet sizing decisions of the cardboard containers in a production system. The model determines the number of cardboard containers that second-tier supplier has to use when the production is higher than the number of available reusable containers.