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Logistics scheduling to minimize inventory and transport costs

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  • Wang, Xiuli
  • Cheng, T.C.E.

Abstract

We study a logistics scheduling problem where a manufacturer receives raw materials from a supplier, manufactures products in a factory, and delivers the finished products to a customer. The supplier, factory and customer are located at three different sites. The objective is to minimize the sum of work-in-process inventory cost and transport cost, which includes both supply and delivery costs. For the special case of the problem where all the jobs have identical processing times, we show that the inventory cost function can be unified into a common expression for various batching schemes. Based on this characteristic and other optimal properties, we develop an O(n) algorithm to solve this case. For the general problem, we examine several special cases, identify their optimal properties, and develop polynomial-time algorithms to solve them optimally.

Suggested Citation

  • Wang, Xiuli & Cheng, T.C.E., 2009. "Logistics scheduling to minimize inventory and transport costs," International Journal of Production Economics, Elsevier, vol. 121(1), pages 266-273, September.
    • Handle: RePEc:eee:proeco:v:121:y:2009:i:1:p:266-273
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    References listed on IDEAS

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    1. Zhi-Long Chen & George L. Vairaktarakis, 2005. "Integrated Scheduling of Production and Distribution Operations," Management Science, INFORMS, vol. 51(4), pages 614-628, April.
    2. Erenguc, S. Selcuk & Simpson, N. C. & Vakharia, Asoo J., 1999. "Integrated production/distribution planning in supply chains: An invited review," European Journal of Operational Research, Elsevier, vol. 115(2), pages 219-236, June.
    3. 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.
    4. Chang, Yung-Chia & Lee, Chung-Yee, 2004. "Machine scheduling with job delivery coordination," European Journal of Operational Research, Elsevier, vol. 158(2), pages 470-487, October.
    5. Nicholas Hall & Chris Potts, 2005. "The Coordination of Scheduling and Batch Deliveries," Annals of Operations Research, Springer, vol. 135(1), pages 41-64, March.
    6. 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.
    7. Zhi-Long Chen & Guruprasad Pundoor, 2006. "Order Assignment and Scheduling in a Supply Chain," Operations Research, INFORMS, vol. 54(3), pages 555-572, June.
    8. Wang, Xiuli & Cheng, T.C.E., 2009. "Production scheduling with supply and delivery considerations to minimize the makespan," European Journal of Operational Research, Elsevier, vol. 194(3), pages 743-752, May.
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    Cited by:

    1. Janiak, Adam & Krysiak, Tomasz, 2012. "Scheduling jobs with values dependent on their completion times," International Journal of Production Economics, Elsevier, vol. 135(1), pages 231-241.
    2. Ullrich, Christian A., 2013. "Integrated machine scheduling and vehicle routing with time windows," European Journal of Operational Research, Elsevier, vol. 227(1), pages 152-165.
    3. Qi, Xiangtong, 2011. "Outsourcing and production scheduling for a two-stage flow shop," International Journal of Production Economics, Elsevier, vol. 129(1), pages 43-50, January.
    4. Ali, Agha Iqbal & O'Connor, Debra J., 2013. "Using truck-inventory-cost to obtain solutions to multi-period logistics models," International Journal of Production Economics, Elsevier, vol. 143(1), pages 144-150.

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