Integrated production and distribution planning for an industrial conglomerate

This paper presents the mathematical modelling of the supply chain of a cluster. This is the association of companies that take a common structure, for the semi-integrated steel industry as a tool for supporting decision looking at minimizing logistics costs of production and distribution of intermediate and final products of this industry. The mathematical model includes: raw material suppliers, manufacturing plants, distribution centers, local sales and imports. The costs associated, are the raw material, transportation and inventory, distribution and administrative expenses. The restrictions that are considered in the model are: the capacity of suppliers and manufacturing plants, satisfaction of demand, balance equations and restrictions on system configuration. The model was validated in a Colombian company presenting satisfactory results. The search for the optimal strategy was established with the support of the Software General Algebraic Modeling System - GAMS with the solver CPLEX(R).