Integrated production-distribution models: a state of the art

Abstract

Production and distribution have traditionally been studied as two independent problems. In reality these supply chain processes highly interact and combined decision support models are therefore needed. Production and distribution can be integrated at different decision levels. At the tactical level, the interdependence between production lot-sizing and routing decisions is explored. At the operational level, the combination of machine scheduling and routing is tackled. Coordination of both functions may lead to a relevant improvement of service level and to substantial savings in the total costs.