Solving a Multi-product Lot-Sizing Problem with Multi-trip Direct Shipment

Abstract

Although the sequential optimization of production, storage, and distribution activities in the supply chain has been studied in depth to generate significant profits. The integrated optimization of the different functions in a coherent way is essential to make a difference in the current economic context, which is experiencing fierce competition in most industrial sectors. In this paper, our study is inspired and motivated by a pharmaceutical company that owns a manufacturing center with two production units. Each production unit specializing in the production of one type of product with different rates depends on its speed, and a fleet of homogeneous vehicles is used to deliver the warehouse (which is itself the distribution center) indirect shipment. We have to take into account certain characteristics, such as the capacity of the production units, multiple products, inventory levels, security stock, and delivery requirements including vehicle capacity and several vehicles available. Each vehicle can perform multiple trips. The aim is to minimize the total cost of production, inventory, and transport. We offer a full linear mixed program for multi-product lot-sizing problemswith the multi-trip direct shipment. The computational experiment results are also presented and discussed through the different scenarios.