Journal
TRANSPORTATION SCIENCE
Volume 49, Issue 4, Pages 784-795Publisher
INFORMS
DOI: 10.1287/trsc.2014.0523
Keywords
lot sizing; production; distribution; routing; heuristics
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This paper investigates the integrated optimization of production, distribution, and inventory decisions related to supplying multiple retailers from a central production facility. A single-item capacitated lot-sizing problem is defined for optimizing production decisions and inventory management. The optimization of daily distribution is modeled as a traveling salesman problem or a vehicle routing problem depending on the number of vehicles. A two-phase iterative method, from which several heuristics are derived, is proposed that iteratively focuses on lot-sizing and distribution decisions. Computational results show that our best heuristic outperforms existing methods.
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