Abstract
Abstract In this paper we investigate the demand planning problem for a petrochemical industry four tiers supply chain that integrates lot-sizing, scheduling with sequence dependent transient costs, transportation and warehousing decisions between suppliers, plants, warehouses, and customers. The problem was modeled using Mixed-Integer Linear Programming (MILP) and featuring a setup carryover and sub-tours elimination constraints. The problem is NP-Hard; therefore, an iterative three stage heuristic was developed which provides quality solutions with a very acceptable computational time. The heuristic computational efficiency was tested on different problem instances of different sizes, and the reported results were within a range of 0.09–2.00% gap from optimality.
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