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A dynamic multi-plant lot-sizing and distribution problem

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  • Maryam Darvish
  • Homero Larrain
  • Leandro C. Coelho

Abstract

In this paper, we investigate a multi-plant, production planning and distribution problem for the simultaneous optimisation of production, inventory control, demand allocation and distribution decisions. The objective of this rich problem is to satisfy the dynamic demand of customers while minimising the total cost of production, inventory and distribution. By solving the problem, we determine when the production needs to occur, how much has to be produced in each of the plants, how much has to be stored in each of the warehouses and how much needs to be delivered to each customer in each period. On a large real data-set inspired by a case obtained from an industrial partner, we show that the proposed integration is highly effective. Moreover, we study several trade-offs in a detailed sensitivity analysis. Our analyses indicate that the proposed scenarios give the company competitive advantage in terms of reduced total logistics cost, and also highlight more possibilities that become available taking advantage of an integrated approach towards logistics planning. These abundant opportunities are to be synergised and exploited in an interconnected open global logistics system.

Suggested Citation

  • Maryam Darvish & Homero Larrain & Leandro C. Coelho, 2016. "A dynamic multi-plant lot-sizing and distribution problem," International Journal of Production Research, Taylor & Francis Journals, vol. 54(22), pages 6707-6717, November.
    • Handle: RePEc:taf:tprsxx:v:54:y:2016:i:22:p:6707-6717
    DOI: 10.1080/00207543.2016.1154623
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    Cited by:

    1. Nguyen, Tiep & Duong, Quang Huy & Nguyen, Truong Van & Zhu, You & Zhou, Li, 2022. "Knowledge mapping of digital twin and physical internet in Supply Chain Management: A systematic literature review," International Journal of Production Economics, Elsevier, vol. 244(C).
    2. Wu, Tao & Huang, Le & Liang, Zhe & Zhang, Xiaoning & Zhang, Canrong, 2022. "A supervised learning-driven heuristic for solving the facility location and production planning problem," European Journal of Operational Research, Elsevier, vol. 301(2), pages 785-796.
    3. Wu, Tao & Xiao, Fan & Zhang, Canrong & Zhang, Defu & Liang, Zhe, 2019. "Regression and extrapolation guided optimization for production–distribution with ship–buy–exchange options," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 129(C), pages 15-37.
    4. Martha-Selene Casas-Ramírez & José-Fernando Camacho-Vallejo & Rosa G. González-Ramírez & José-Antonio Marmolejo-Saucedo & José-Manuel Velarde-Cantú, 2018. "Optimizing a Biobjective Production-Distribution Planning Problem Using a GRASP," Complexity, Hindawi, vol. 2018, pages 1-13, February.
    5. Hrabec, Dušan & Hvattum, Lars Magnus & Hoff, Arild, 2022. "The value of integrated planning for production, inventory, and routing decisions: A systematic review and meta-analysis," International Journal of Production Economics, Elsevier, vol. 248(C).
    6. Pereira, Daniel Filipe & Oliveira, José Fernando & Carravilla, Maria Antónia, 2020. "Tactical sales and operations planning: A holistic framework and a literature review of decision-making models," International Journal of Production Economics, Elsevier, vol. 228(C).
    7. Aura Jalal & Aldair Alvarez & Cesar Alvarez-Cruz & Jonathan La Vega & Alfredo Moreno, 2023. "The robust multi-plant capacitated lot-sizing problem," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 31(2), pages 302-330, July.
    8. Märkle-Huß, Joscha & Feuerriegel, Stefan & Neumann, Dirk, 2020. "Cost minimization of large-scale infrastructure for electricity generation and transmission," Omega, Elsevier, vol. 96(C).
    9. Zhou, Shenghan & Zhou, Yuliang & Zuo, Xiaorong & Xiao, Yiyong & Cheng, Yang, 2018. "Modeling and solving the constrained multi-items lot-sizing problem with time-varying setup cost," Chaos, Solitons & Fractals, Elsevier, vol. 116(C), pages 202-207.
    10. Darvish, Maryam & Coelho, Leandro C., 2018. "Sequential versus integrated optimization: Production, location, inventory control, and distribution," European Journal of Operational Research, Elsevier, vol. 268(1), pages 203-214.

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