Multi-site integrated production-distribution planning with trans-shipment: a fuzzy goal programming approach

This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. The publisher does not give any warranty express or implied or make any representation that the contents will be complete or accurate or up to date. The accuracy of any instructions, formulae, and drug doses should be independently verified with primary sources. The publisher shall not be liable for any loss, actions, claims, proceedings, demand, or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with or arising out of the use of this material. In multi-site (parallel) manufacturing systems, each selling region (SR) is usually allocated to a specific manufacturing site (MS) in order to minimise the transportation costs, simplify the planning process, etc. However, such manufacturing systems usually encounter great drawbacks in terms of over-achievement or under-achievement of the forecasted demand due to isolation of the MSs. To cope with this drawback, this paper proposes a novel framework for preparing an optimal aggregate production plan by interconnecting the MSs through lateral transshipment. In the presence of fluctuating and dynamic demands, we apply some classic strategies including the inventory holding, back-ordering, and additional capacity options (i.e. overtime and changing workforce level) as well as lateral transshipment of products among MSs as the feasible strategies undertaken. Maximising the total profit and minimising the manufacturing lead time are considered as two managerial goals. Due to ambiguousness of some critical parameters as well as vagueness of objectives' target values, a fuzzy goal programming (FGP) approach with imprecise goal hierarchy is developed for modelling the aggregate production-distribution planning (APDP) problem with transshipment. The proposed FGP model is then converted to an equivalent crisp one by combining the two recently developed fuzzy programming approaches. An illustrative example inspired by a real case study is provided to show the usefulness and applicability of the proposed model. 1. Introduction Aggregate production planning (APP) is a medium range capacity planning typically concerned with the determination of production, inventory, and workforce levels to meet the fluctuating demand requirements over a given mid-term horizon. Normally, the physical resources of the firm are assumed to be fixed during the planning horizon of interest and the planning effort is oriented towards the best utilisation of those resources, given the external demand requirements. It is …