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Integrated Scheduling of Production and Distribution Operations

Author

Listed:
  • Zhi-Long Chen

    () (Department of Decision and Information Technologies, Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742-1815)

  • George L. Vairaktarakis

    () (Department of Operations, Weatherhead School of Management, Case Western Reserve University, Cleveland, Ohio 44106-7235)

Abstract

Motivated by applications in the computer and food catering service industries, we study an integrated scheduling model of production and distribution operations. In this model, a set of jobs (i.e., customer orders) are first processed in a processing facility (e.g., manufacturing plant or service center) and then delivered to the customers directly without intermediate inventory. The problem is to find a joint schedule of production and distribution such that an objective function that takes into account both customer service level and total distribution cost is optimized. Customer service level is measured by a function of the times when the jobs are delivered to the customers. The distribution cost of a delivery shipment consists of a fixed charge and a variable cost proportional to the total distance of the route taken by the shipment. We study two classes of problems under this integrated scheduling model. In the first class of problems, customer service is measured by the average time when the jobs are delivered to the customers; in the second class, customer service is measured by the maximum time when the jobs are delivered to the customers. Two machine configurations in the processing facility---single machine and parallel machine---are considered. For each of the problems studied, we provide an efficient exact algorithm, or a proof of intractability accompanied by a heuristic algorithm with worst-case and asymptotic performance analysis. Computational experiments demonstrate that the heuristics developed are capable of generating near-optimal solutions. We also investigate the possible benefit of using the proposed integrated model relative to a sequential model where production and distribution operations are scheduled sequentially and separately. Computational tests show that in many cases a significant benefit can be achieved by integration.

Suggested Citation

  • Zhi-Long Chen & George L. Vairaktarakis, 2005. "Integrated Scheduling of Production and Distribution Operations," Management Science, INFORMS, vol. 51(4), pages 614-628, April.
  • Handle: RePEc:inm:ormnsc:v:51:y:2005:i:4:p:614-628
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    File URL: http://dx.doi.org/10.1287/mnsc.1040.0325
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    References listed on IDEAS

    as
    1. Herrmann, Jeffrey W. & Lee, Chung-Yee, 1993. "On scheduling to minimize earliness-tardiness and batch delivery costs with a common due date," European Journal of Operational Research, Elsevier, vol. 70(3), pages 272-288, November.
    2. Chen, Zhi-Long, 1996. "Scheduling and common due date assignment with earliness-tardiness penalties and batch delivery costs," European Journal of Operational Research, Elsevier, vol. 93(1), pages 49-60, August.
    3. Li, Chung-Lun & Vairaktarakis, George & Lee, Chung-Yee, 2005. "Machine scheduling with deliveries to multiple customer locations," European Journal of Operational Research, Elsevier, vol. 164(1), pages 39-51, July.
    4. Cheng, T. C. Edwin & Gordon, Valery S. & Kovalyov, Mikhail Y., 1996. "Single machine scheduling with batch deliveries," European Journal of Operational Research, Elsevier, vol. 94(2), pages 277-283, October.
    5. Chandra, Pankaj & Fisher, Marshall L., 1994. "Coordination of production and distribution planning," European Journal of Operational Research, Elsevier, vol. 72(3), pages 503-517, February.
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