Production Planning Optimization in a Two-Echelon Multi-Product Supply Chain with Discrete Delivery and Storage at Manufacturer’s Warehouse

Maedeh Tajik, Seyed Mohammad Hajimolana and Mohammad Daneshvar Kakhki ()
Additional contact information
Maedeh Tajik: Science and Research Branch, Islamic Azad University, Tehran 1477893855, Iran
Seyed Mohammad Hajimolana: Science and Research Branch, Islamic Azad University, Tehran 1477893855, Iran
Mohammad Daneshvar Kakhki: Haworth College of Business, Western Michigan University, Kalamazoo, MI 49008, USA

Mathematics, 2024, vol. 12, issue 13, 1-19

Abstract: In today’s competitive world, customers expect their demands to be met at the shortest possible time, while manufacturers aspire to deliver the orders within a convenient time and at a minimum cost. Thus, manufacturers are compelled to seek ways of lowering the costs of their services in order to satisfy customers and survive the competition in their respective industries. This research paper investigates a multi-product problem in a two-echelon supply chain consisting of a single manufacturer and several retailers. The main objective of this research is to develop and present a multi-product optimization model in which retailers receive their orders through discrete delivery and surplus manufactured goods are stored in the manufacturer’s warehouse. The objective function of the mathematical model in the economic dimension includes the minimization of the total supply chain costs and the maximization of profit. The retailers in this model place new orders when their inventory level drops to zero, and the manufacturer responds to the retailers’ orders at the same time as it begins processing each product. After delivering the last set of orders, the manufacturer stores surplus items in its warehouse in case the retailers place new orders. This optimization problem is modeled using mixed integer nonlinear programming, while numerical scenarios are coded using the MATLAB software which helps estimate the total cost within a short time. Finally, a sensitivity analysis is performed to determine the effects of a number of factors on the total cost, including problem parameters, demand and production rates, the production quantity, and the number of times the manufacturing machines are operated at each production cycle.

Keywords: production planning; inventory control; two-echelon supply chain; multi-product (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7390/12/13/1986/pdf (application/pdf)
https://www.mdpi.com/2227-7390/12/13/1986/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jmathe:v:12:y:2024:i:13:p:1986-:d:1423645

Access Statistics for this article

Mathematics is currently edited by Ms. Emma He

More articles in Mathematics from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().