Abstract:

In this paper we address the integration of two-level supply chain with multiple items, production facility and retailers’ demand over a considered discrete time horizon. This two-level production distribution system features capacitated production facility supplying several retailers located in the same region. If production does take place, this process incurs a fixed setup cost as well as unit production costs. In addition, deliveries are made from the plant to the retailers by a limited number of capacitated vehicles and routing costs are incurred. This work aims at implementing a solution to minimize the sum of the costs at the production facility and the retailers. The methodology adopted to tackle this issue is based on a hybrid heuristic, greedy and genetic algorithms that uses strong formulation to provide a good solution of a guaranteed quality that are as good or better than those provided by the MIP optimizer with a considerably larger run time. The results demonstrate that the proposed heuristics are effective and performs impressively in terms of computational efficiency and solution quality.

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