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Joint cyclic production and delivery scheduling in a two-stage supply chain

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  • Pundoor, Guruprasad
  • Chen, Zhi-Long

Abstract

We study an integrated production and distribution scheduling model in a two-stage supply chain consisting of one or more suppliers, a warehouse, and a customer. Each supplier produces a different product at a constant rate. There is a setup time and a setup cost per production run for each supplier. Completed products are first delivered from the suppliers to the warehouse and are then sent from the warehouse to the customer. The customer's demand for each product is constant over time. The problem is to find jointly a cyclic production schedule for each supplier, a cyclic delivery schedule from each supplier to the warehouse, and a cyclic delivery schedule from the warehouse to the customer so that the customer demand for each product is satisfied without backlog at the least total production, inventory and distribution cost. We consider two production and delivery scheduling policies. We derive either an exact or a heuristic solution algorithm for the problem under each policy. Heuristics are evaluated computationally. We also evaluate the value of the warehouse by comparing our model with a model that does not have the warehouse in the supply chain (i.e. the products are delivered directly from the suppliers to the customer). Various managerial insights based on an extensive set of computational tests are reported, including how the value of warehouse and the delivery frequency from the suppliers to the warehouse are influenced by various problem parameters including production rates of the suppliers, unit inventory costs, delivery costs, and the warehouse location.

Suggested Citation

  • Pundoor, Guruprasad & Chen, Zhi-Long, 2009. "Joint cyclic production and delivery scheduling in a two-stage supply chain," International Journal of Production Economics, Elsevier, vol. 119(1), pages 55-74, May.
    • Handle: RePEc:eee:proeco:v:119:y:2009:i:1:p:55-74
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    3. Gao, Su & Qi, Lian & Lei, Lei, 2015. "Integrated batch production and distribution scheduling with limited vehicle capacity," International Journal of Production Economics, Elsevier, vol. 160(C), pages 13-25.
    4. Liu, Weihua & Wang, Qian & Mao, Qiaomei & Wang, Shuqing & Zhu, Donglei, 2015. "A scheduling model of logistics service supply chain based on the mass customization service and uncertainty of FLSP’s operation time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 83(C), pages 189-215.
    5. Ik Sun Lee, 2016. "Production and shipment policy under dynamic demand in the supply chain environments," International Journal of Applied Management Science, Inderscience Enterprises Ltd, vol. 8(1), pages 1-19.
    6. Qiu, Xuan & Luo, Hao & Xu, Gangyan & Zhong, Runyang & Huang, George Q., 2015. "Physical assets and service sharing for IoT-enabled Supply Hub in Industrial Park (SHIP)," International Journal of Production Economics, Elsevier, vol. 159(C), pages 4-15.
    7. Wang, Xiuli & Cheng, T.C.E., 2009. "Heuristics for parallel-machine scheduling with job class setups and delivery to multiple customers," International Journal of Production Economics, Elsevier, vol. 119(1), pages 199-206, May.
    8. Selvarajah, Esaignani & Zhang, Rui, 2014. "Supply chain scheduling at the manufacturer to minimize inventory holding and delivery costs," International Journal of Production Economics, Elsevier, vol. 147(PA), pages 117-124.
    9. Wang, Gang & Lei, Lei, 2012. "Polynomial-time solvable cases of the capacitated multi-echelon shipping network scheduling problem with delivery deadlines," International Journal of Production Economics, Elsevier, vol. 137(2), pages 263-271.
    10. Jun Pei & Xinbao Liu & Panos M. Pardalos & Wenjuan Fan & Ling Wang & Shanlin Yang, 2016. "Solving a supply chain scheduling problem with non-identical job sizes and release times by applying a novel effective heuristic algorithm," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(4), pages 765-776, March.
    11. Simin Zhang & Haiqing Song, 2018. "Production and Distribution Planning in Danone Waters China Division," Interfaces, INFORMS, vol. 48(6), pages 578-590, November.
    12. Sancak, Emre & Salman, F. Sibel, 2011. "Multi-item dynamic lot-sizing with delayed transportation policy," International Journal of Production Economics, Elsevier, vol. 131(2), pages 595-603, June.

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