A Mathematical Programming Model for Aggregate Production-Distribution Planning in Supply Chain

The purpose of this paper is to formulate the generalized supply chain problem in which the objective is to minimize sum of the costs incurred within all of the levels. A mixed integer linear programming (MILP) model is proposed for the problem. Different constraints such as production capacity in regular and overtimes, inventory holding capacities, and distribution capacity with regard to different modes of transportation, are considered. Inventory shortages and lead-times for transportation between different levels are also incorporated into the model. The developed MILP model can be used to compute the optimal solution for the small-sized problems.

Keywords:

Aggregate production-distribution , Supply chain , Mathematical programming