Multi-site integrated production and distribution planning: a multi-objective approach

Abstract

To compete in this globalised market, enterprises should focus on optimising and integrating production and distribution functions simultaneously. This study deals with the problem of integrated production and distribution planning in multi-site manufacturing environment. A multi-objective mixed integer programming model is formulated considering three important aspects of production and distribution planning; capacity of heterogeneous transportation, setup and backordering. Three conflicting objectives that need to be minimised are total cost, delivery time and backorder level. To solve the proposed multi-objective mathematical model, preemptive goal programming approach is implemented. A real world case example of an automobile industry is considered to demonstrate analytical results of the proposed approach. Further analysis is conducted to visualise effect of changing priority level on objective functions and deviation variables. The results demonstrate flexibility of decision maker by adjusting priorities of objective functions according to importance and aspiration level with respect to desired target values.