Decentralized Production-Distribution Planning in a Supply Chain: Computer Experiments.

It has been realized long back by the supply chain managers that the channel partners like suppliers, manufacturers, distributors, retailers can benefit by sharing information about their domain with other channel partners. The supply chain costs such as production costs, distribution costs can be reduced by sharing the information and the service can be improved by quickly responding to the changes in demand. But a practical difficulty is that the channel partners do not like to share complete information about their domain with others. Because, they feel that by doing so, they will lose grip on their domain, and also feel that the shared information could reach their rivals. In this paper, the authors propose a production distribution planning model for a supply chain with partial information sharing. This type of supply chains are found where the third party logistics (3PL) are involved. In 3PL, the transportation facilities (vehicles) are owned by private parties (i.e. they are not owned by plant owners) in this type of distribution, the plant managers and distribution service providers share partial information. They will not share information about their capacities and costs, but share information such as the desired production quantity by the distributors and possible production quantity by the plant managers. Under such situations, the model proposed in this paper is appropriate.. The authors tested the model for problems generated with uniform random numbers between minimum and maximum values for the costs and capacities. The results indicate that the proposed model can be applied to real life problems where third party logistics are involved (C) 2019 Elsevier Ltd. All rights reserved. Selection and/or Peer-review under responsibility of International Conference on Advances in Materials and Manufacturing Engineering, ICAMME-2018.