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ISSN : 1598-7248 (Print)
ISSN : 2234-6473 (Online)
Industrial Engineering & Management Systems Vol.5 No.2 pp.132-141
DOI :

Multi-Period Integrated Inventory and Distribution Planning with Dynamic Distribution Center Assignment

Sang Hwa Song
Graduate School of Logistics, University of Incheon 994-52, Songdo Dong, Yon Su Gu, Incheon 406-130, Korea
Received May 2006; Accepted July 2006

Abstract

This paper considers an integrated problem of dealing with multi-period production, inventory and distribution planning issues together in a supply chain network and the distribution issue is represented as a dynamic assignment model. The objective of the problem is to minimize the sum of all the associated costs, including inventory-holding cost, transportation cost, production cost, and set-up cost, subject to a variety of constraints such as inventory-balance constraints, set-up constraints, and assignment constraints. A solution algorithm is developed based on the Benders’ decomposition approach and tested for its effectiveness and efficiency with various numerical examples. Experimental tests show that the algorithm performs very effectively at the rate of within 5% gap and also in reasonable computation time.

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