Joint production-planning and distribution optimization of perishable products under a combined shipment structure: A new hybrid policy-based approach

Abstract

Following the need for joint optimization of decisions in supply chains, this paper newly provides an integrated framework to efficiently fulfill a production-planning-routing problem (PPRP). In such integrated scheme, a set of perishable family-products are manufactured on a single batch-processing machine. These products are dispatched to the customers by a third-party logistics service provider with only two types of licensed eco-friendly transportation facilities. In order to efficiently deliver the manufactured products before they become unusable, we propose a combined shipment structure. To accomplish this, we formulate the problem in the context of a MILP model. In particular, we aim to establish two manufacturing policies based on both increasing and decreasing rates of production and also two delivery policies expressing distinct preferences in fulfilling the customers’ demands. In this regards, we investigate the cost structures obtained from the established integrated planning and the resulting distribution configurations as well. Further, four heuristic algorithms are developed for solving the problem with respect to each hybrid production/distribution scheme derived from the former policies. Finally, to compare the mentioned procedures, it is conducted a numerical study illustrating the preferable efficiency of the plan gained according to the hybrid of the increasing-production-rate and decreasing-delivery-distance policies.