Title: Integrated planning in a multi-site procurement, production and distribution system under rolling schedule

Authors: Atul P. Kanyalkar, Gajendra K. Adil

Addresses: Shailesh J. Mehta School of Management, Indian Institute of Technology-Bombay, Powai, Mumbai 400076, India. ' Shailesh J. Mehta School of Management, Indian Institute of Technology-Bombay, Powai, Mumbai 400076, India

Abstract: This paper develops a mixed integer programming model for integrated planning of multi-site procurement, production and distribution system at aggregate and detailed levels under a rolling schedule in the context of a multinational consumer goods company. The model considers a trade-off among plan change cost or nervousness cost, safety stock (service level) violation penalty to a given customer service level, inventory carrying cost, external storage cost and transportation cost, limitations of storage space, raw material availability and production capacity. The model was applied to 100 randomly generated industry size problem instances involving 18,450 variables including 832 integer variables and 5,347 constraints. With an imposed limit of 300 seconds of CPU time on an integer programming solver, solution of the model yielded average gap of 0.43% for these problems.

Keywords: multi-site planning; rolling schedules; nervousness; integrated planning; production systems; procurement systems; distribution systems; mixed integer programming; aggregate levels; detailed levels; consumer goods; multinational corporations; MNCs; trade-offs; plan changes; safety stocks; service levels; violation penalties; customer service; inventory carrying; external storage; transportation; inventories; costs; storage space; space limitations; raw materials; materials availability; production capacity; variables; constraints; services management; operations management.

DOI: 10.1504/IJSOM.2011.040706

International Journal of Services and Operations Management, 2011 Vol.9 No.2, pp.162 - 182

Published online: 11 Mar 2015 *

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