Integrated production scheduling and distribution allocation for multi-products considering sequence-dependent setups: a practical application

Abstract

This paper proposes an integrated multi-product production planning and distribution allocation in the supply chain network, including the detailed production sequences in each production line for a dairy manufacturing. The models are designed for manufacturers that produce multi-products. One of the concerns of the multi-products manufacturers is the sequence-dependent changeover times and costs that occur when switching from one type of product to another. The models are developed into two-stages due to different levels of decisions. The first stage models the supply chain network that determines the optimum production planning for each product type on each production line, delivery schedule, and inventory planning for the entire supply chain simultaneously to maximize the total profit. Sequentially, based on the optimal production planning, detailed production schedules are then optimized in the second stage of the model with minimizing total setup costs as the objective. The result shows that the proposed models significantly reduce the total cost and consequently increase the annual gross profit.