Simultaneous supply and production planning

Abstract

This paper considers a novel production and logistics planning problem called the Economic Lot and Supply Scheduling Problem. The problem combines the Economic Lot-Sizing Problem and the Vehicle Routing Problem into a simultaneous problem-solving approach. The considered problem is observable in several industrial areas, e.g. in retailing and in the automotive industry. Assuming a certain delivery policy the paper presents a complete mathematical model and a ϵ-exact solution procedure. Analytical results for a broad range of test instances are calculated which demonstrate new insights into the considered planning problem. The results emphasise the economic advantage of the proposed simultaneous modeling and solution approach, especially for certain parameter settings.

Keywords:

• ELSSP
• lot-sizing
• scheduling
• inventory
• vehicle routing
• common cycle policy