Optimal production plans and shipment schedules in a supply-chain system with multiple suppliers and multiple buyers

This research addresses an optimal policy for production and procurement in a supply-chain system with multiple non-competing suppliers, a manufacturer and multiple non-identical buyers. The manufacturer procures raw materials from suppliers, converts them to finished products and ships the products to each buyer at a fixed-interval of time over a finite planning horizon. The demand of finished product is given by buyers and the shipment size to each buyer is fixed. The problem is to determine the production start time, the initial and ending inventory, the cycle beginning and ending time, the number of orders of raw materials in each cycle, and the number of cycles for a finite planning horizon so as to minimize the system cost. A surrogate network representation of the problem developed to obtain an efficient, optimal solution to determine the production cycle and cycle costs with predetermined shipment schedules in the planning horizon. This research prescribes optimal policies for a multi-stage: production and procurements for all shipments scheduled over the planning horizon. Numerical examples are also provided to illustrate the system. (C) 2008 Elsevier B.V. All rights reserved.