Production routing problem in shared manufacturing: Robust chance-constrained formulation and multi-diversification based matheuristic

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Building on the concept of the sharing economy, which capitalizes on the advancements in information and manufacturing technologies, the shared manufacturing paradigm has tremendous potential for enhancing the performance of production–distribution systems and has become prevalent in the today’s manufacturing industry. Despite the extensive research on the production routing problem, which integrates decisions of production, inventory, and distribution routing, there is a notable absence of investigation within the context of shared manufacturing. This paper aims to bridge the above-mentioned research gap and develop valuable decision-support tools for managers, assisting efficient management of production–distribution systems in shared manufacturing environments. To achieve this, this paper introduces a general model for the production routing problem with shared manufacturing resources. The problem is formulated as a robust chance-constrained model to address uncertainties arising in customer demand and the demand and supply of shared manufacturing resources. Subsequently, a computationally tractable formulation is derived, for which a matheuristic that incorporates three diversification techniques is proposed to solve. Extensive computational experiments are conducted to validate the feasibility and effectiveness of both the model and the matheuristic, as well as to evaluate the benefits of manufacturing resource sharing. The experimental results demonstrate that our matheuristic outperforms state-of-the-art solution approaches. Moreover, manufacturing resource sharing can lead to significant reductions in operational costs and improvements in service levels. Finally, the advantages are found to increase as manufacturing resource unit purchasing costs decrease, demand fluctuations decrease, and production interruption severity increases.