Optimization-based Distribution Planning for Consumer Electronic Items

Abstract

This paper describes the application of network modeling and optimization for short-term distribution planning in an Indian electronics firm. The company has three production centres, each comprising several factories. Each day, it ships finished product from the three production centres to 23 distribution centres (namely, its branches and sub-branches) spread all over the country. The present problem may be stated as: given the planned production quantity at each production centre and the estimated demand at each distribution centre for each week of a given month, specify the quantities to be dispatched from each production centre to the various distribution centres in each week of the month. The problem is modelled as a multi-period, minimum-cost, network flow model for each product item. The paper also discusses the implementation and actual use of the model for monthly distribution planning at the company.