Optimal control of a multi-supplier and multi-buyer supply chain system with JIT delivery

Abstract

A just-in-time centred production-facility supply chain consists of raw material suppliers, manufacturer, and retailers. This paper considers the concept where the production of finished goods follows continuous production cycles. In this scenario, it is assumed that the inventory build-up during production cycles of the concurrent cycle overlap the pure demand consumption cycle to reduce the idle time suggested by previous researchers. Considering this situation, a supply chain inventory models for raw materials, and finished goods supply are developed for multiple suppliers and multiple buyers. In addition, this paper considered that different suppliers deliver the raw materials in instantaneous replenishments supply, and the finished goods are delivered to multiple buyers in a fixed amount after a fixed interval of time (known as just-in-time delivery) according to buyers' demand. The problem in this research is formulated as an integer nonlinear programming problem and heuristic solutions are developed to solve it with the help of integer approximations and divide-and-conquer technique. The solution methodologies suggested lead to estimates of optimum production quantity and minimum total system cost. The solutions are verified through numerical examples and illustrated the effectiveness of the method with sensitivity analyses. [Submitted: 27 September 2019; Accepted: 3 January 2020]