An integrated model for the production-inventory-distribution problem in the Physical Internet

Shou-feng Ji, Xiao-shuai Peng and Rong-juan Luo

International Journal of Production Research, 2019, vol. 57, issue 4, 1000-1017

Abstract: In contrast to traditional supply chain networks, Physical Internet (PI) is an interconnected open global logistics network based on open PI hubs and standard PI-containers that has the potential to achieve ground-breaking improvements in integrated production-inventory-distribution management. In this paper, to quantify the advantages of PI from a cost performance perspective, we propose a mixed-integer linear programming (MILP) formulation for addressing the problem that combines an integrated production-inventory-distribution decision with PI, which has been addressed separately in the existing literature. The results of computational experiments show that while achieving a comparable or better service level, PI can achieve significant cost savings compared to a traditional supply chain network with a dynamic configuration and a hybrid configuration. Moreover, we investigate the impact of several problem parameter changes on the total costs under each network setting, and managerial insights are derived.

Date: 2019
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Citations: View citations in EconPapers (6)

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DOI: 10.1080/00207543.2018.1497818

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