Integrated decision support models for production and routing decisions in real-world supply chains (R-5460)

Production and distribution have traditionally been studied as two independent decision problems. In reality these supply chain processes highly interact and combined decision support models are therefore needed. An integrated view of the critical logistic decisions may lead to a relevant improvement of service level and to substantial savings in the total costs sustained for inventory, work in progress, setups, and transportation. However, this results in complex combinatorial optimization problems, covering multiple decision levels. At the tactical decision level, the interdependence between production lot sizing and routing decisions will be explored. In this research proposal, solution methods for the multi-plant, multi-product Production Routing Problem (PRP) will be developed, taking into account delivery time windows at customer locations. A hybrid metaheuristic approach is constructed for realistic PRP problems in current supply chains. At the operational decision level, the combination of machine scheduling and routing will be tackled. First a well-defined problem formulation is drawn up which takes into account necessary extensions to the classical vehicle routing problem to incorporate scheduling decisions. Next, appropriate solution techniques are investigated and a matheuristic is developed for the integrated machine scheduling and routing problem.

Keywords:Distribution logistics, Freight transport

Disciplines:Applied economics, Economic development, innovation, technological change and growth, Economic history, Macroeconomics and monetary economics, Microeconomics, Tourism