Tabu search with path relinking for an integrated production-distribution problem

This paper deals with the problem of integrating production and distribution planning over periods of a finite horizon. We consider a capacity-constrained plant that produces a number of items distributed by a fleet of homogenous vehicles to customers with known demand for each item in each period. The production planning defines the amount of each item produced in every period, while the distribution planning defines when customers should be visited, the amount of each item that should be delivered to customers, and the vehicle routes. The objective is to minimize production and inventory costs at the plant, inventory costs at the customers and distribution costs. We propose two tabu search variants for this problem, one that involves construction and a short-term memory, and one that incorporates a longer term memory used to integrate a path relinking procedure to the first variant. The proposed tabu search variants are tested on generated instances with up to ten items and on instances from the literature involving a single item. (C) 2010 Elsevier Ltd. All rights reserved.