A network prototype for integrated production-distribution planning with non-multi-functional plants

Abstract

This paper proposes a two-echelon network prototype for integrated production and distribution planning where non-multi-functional plants supply multiple types of products with limited quantities to the customers via capacitated warehouses. Four variations of the prototype, formulated as individual mixed integer programming models, are solved using the branch and bound algorithms by numerical experiments to examine the cost implications of production-distribution strategies involving single-sourcing constraints on different levels of the supply chain. Further discussions on the practicality and versatility of the proposed prototype (i.e. its ability to consider different facility locations, specialised capabilities of individual plants, safety stock levels and demand characteristics) illustrate the usefulness of the prototype to industry practitioners when making strategic and/or tactical decisions.