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c
a r t i c l e
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Article history:
Received 18 June 2010
Received in revised form
14 December 2011
Accepted 10 July 2012
Available online 11 August 2012
Keywords:
Productiondistribution planning
Supply chain management
Integration, Optimisation
Survey
a b s t r a c t
Optimisation modelling of integrated productiondistribution (PD) plans has raised signicant interest
among both researchers and practitioners over the past two decades. This paper provides the readers
with a comprehensive review and critique on the current PD planning and optimisation literature. We
classify the published PD planning models into seven categories based on their degree of complexity
and hence capability in addressing real-life scenarios. Summary tables highlight the main characteristics
of the selected models at each category. Next, the paper reclassies and evaluates the proposed models
based on the solution techniques used. Lastly, the unaddressed areas in the current literature are highlighted, important managerial implications are proposed and directions for future research in the area
are suggested.
2012 The Society of Manufacturing Engineers. Published by Elsevier Ltd. All rights reserved.
Contents
1.
2.
3.
4.
5.
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Integrated PD planning problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Complexity-based classication of literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.1.
Single-product models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2.
Multiple-product, single-plant models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.3.
Multiple-product, multiple-plant, single or no warehouse models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4.
Multiple-product, multiple-plant, multiple-warehouse, single/no end-user models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.5.
Multiple-product, multiple-plant, multiple-warehouse, multiple-end user, single-transport path models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.6.
Multiple-product, multiple-plant, multiple-warehouse, multiple-end user, multiple-transport path, no-time period models . . . . . . . . . . .
3.7.
Multiple-product, multiple-plant, multiple-warehouse, multiple-end user, multiple-transport path, no-time period models . . . . . . . . . . .
Solution-based classication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1.
Mathematical techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2.
Heuristic techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3.
Simulation modelling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.4.
Genetic algorithms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Implications for the future of PD planning and optimisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1.
Category-based modelling implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1.1.
Category-based observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1.2.
Identied research gaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1.3.
Future research trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2.
General PD modelling implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2.1.
General observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
2
2
3
4
6
8
9
11
11
11
11
14
14
14
15
15
15
15
15
15
16
6.
5.2.2.
Identied research gaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2.3.
Future research trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conclusions and directions for future research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Introduction
A supply chain (SC) can be dened as an integrated system synchronising a series of interrelated business processes in order to: (1)
acquire raw materials and parts, (2) transform these raw materials
and parts into nished products, and (3) distribute these products
to either retailers or customers. A SC facilitates information ow
among various business entities such as suppliers, manufacturers,
distributors, third party logistic providers, retailers and customers
[1]. The two core optimisation problems in a SC are production and
distribution planning. In production planning, decisions regarding
hiring and ring of labour, regular time and overtime production,
subcontracting, and machine capacity levels are made for a denite
planning horizon (i.e. usually a one year period). Distribution planning decisions, on the other hand, pertain to determining which
facility(ies) would cater to the demands of which market(s).
In a conventional SC, independent manufacturers, wholesalers,
and retailers are separate business entities seeking to maximise
their own prots, although this goal is known to eventually produce
prot for the system as a whole [2]. It is now demonstrated that production and distribution decisions are mutually related problems
and need to be dealt with simultaneously in an integrated manner [3]. Developing integrated SC models with centralised planning
naturally leads to complex models which are difcult to solve optimally. For this reason alternative solution techniques developed in
the literature are only used to provide near optimal solutions for
small to medium-size integrated SC planning models [2].
Productiondistribution (PD) planning and optimisation in the
context of supply chain management (SCM) has raised signicant
interest for both researchers and practitioners over the past few
years. There might be two primary reasons behind this trend: (1)
positively affecting the protability of the SC through the global
integration of production and distribution activities and (2) reducing the lead-times and offering quicker response to market changes
and hence reducing the propagation of unexpected and undesirable events through the network [4,5]. These are the drivers for
the extensive literature addressing the modelling and optimisation of integrated PD plans in SCs. This paper aims to provide a
comprehensive review and critique on the current literature of PD
planning with special emphasis placed on those targeting the global
optimisation of production and distribution activities. The paper
will highlight the unaddressed areas in the current literature, proposes important managerial implications and suggests directions
for future research in the area.
2. Integrated PD planning problem
A vast amount of research has addressed the issue of optimisation of production plans in the SC context [615]. Many others
have investigated the problems exclusively in the area of distribution planning [1621]. However, a new approach to the analysis of
production and distribution operations has been proposed based
on the integration of decisions of different functions in production and distribution networks into a single optimisation model.
A PD system (depicted in Fig. 1) is often composed of factories
producing the goods and a hierarchy of warehouses or distribution centres (DCs) stocking goods for distribution to retail stores
where the demand for these goods originates [22]. A PD planning
problem is the problem of simultaneously optimising the decision
16
16
16
17
variables of different functions that have traditionally been optimised sequentially in the sense that the optimised outputs of the
production stage have become the input to the distribution stage.
A complex integrated PD plan, illustrated in Fig. 1, deals with
the following problems within the context of SC planning:
Quantity of each product produced in regular-time in each plant
at each period.
Quantity of each product produced in overtime in each plant at
each period.
Quantity of each product outsourced by each manufacturing plant
at each period.
Work-in-Progress (WIP) inventory amount in each plant at the
end of each period.
Inventory amount of nished products temporarily stored in the
stack buffers in each plant at the end of each period.
Quantity of each product shipped from stack buffers to warehouses during each period.
Quantity of each product shipped from warehouses to end-users
during each period.
Quantity of each product shipped from stack buffers directly to
end-users during each period.
Inventory of nished products stored in warehouses at each
period.
Quantity of each product backordered (i.e. shortage or backlogging amount) in each end-user location at the end of each period.
Due to the high number of decision variables, the problem
presented by the PD systems analysis is so complex that optimal solutions are very hard to obtain. The difculties associated
with this type of decision-making can be further amplied by
the complex maze of the network, geographical span of the SC,
and involvement of varied entities with conicting objectives
[23,24]. Indeed, simplication of a real-life scenario in developing a SC model has become unavoidable as most of the complex
PD planning problems are classied under the category of NP-hard
problems [25,26]. Such simplications have led to the development
of a variety of PD planning models in the literature.
3. Complexity-based classication of literature
It is not an easy task to classify the existing literature of integrated PD planning and optimisation. There are three reasons
supporting this difculty [27]:
1. All the developed models consider cost minimisation, prot
maximisation or a combination of both as their objective function.
2. There is a wide variety of assumptions and considerations that
can be made when proposing PD planning models.
3. The literature in the eld is so extensive and a unied body does
not exist.
Few literature surveys on the proposed PD models have
been published [1,25,2744]. Despite the variety of the published
reviews, our survey on the current literature indicates that there is
no specic review on comparing the actual capabilities of the proposed PD models based on their degree of complexity as well as
the solution approaches applied. In this paper, we present a review
Table 1
Classication of literatureCategory 1.
Author(s), year
Multiple
product
types
TCM
. . .a
TCM
...
Demirli and
Yimer, 2006
Yilmaz and
Catay, 2006
TCM
...
TCM
...
Boudia et al.,
2007
TCM
...
Coronado, 2008
TCM
...
Hamedi et al.,
2009
TCM
...
Bard and
Nananukul,
2009
TCM
...
a
b
c
...
...
Multiple
machine
centres
Stack
buffers
in
plants
...
...
Multiple
DCs
Multiple
end-users
...
Multiple
transport
paths
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
Multiple
time-periods
Production
alternatives
Production
cost
elements
...
...
Inventory
costs
Shortage/
penalty
costs
...
...
...
...
...
...
...
...
...
Xc
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
A mixed 01 integer
programming
Linear programming
and a combined hybrid
genetic algorithm and
analytic hierarchy
process
MIFP model
MIP model solved with
three LP
relaxation-based
heuristics
A GRASP and two
improved versions
using a reactive
mechanism or a
path-relinking process
A nonlinear
programming
formulation and a
heuristic to decompose
the original
formulation into two
easy-to-solve LP
problems
A hierarchical solution
algorithm and a MILP
coded using LINGO
8.00
A two-phase approach
centring on reactive
tabu search algorithm
Multiple
manuf.
plants
Methods applied
Table 2
Classication of literatureCategory 2.
Author(s), year
TCM
Barbarosoglu and
Ozgur, 1999
TCM
Ozdamar and
Yazgac, 1999
Lee and Kim,
2000, 2002
TCM
TCM
TCM
TCM
Elahipanah and
Farahani, 2008
TCM
TCM
Multiple
product
types
Multiple
manuf.
plants
Multiple
machine
centres
...
...
...
...
...
...
...
...
...
...
...
Stack
buffers
in
plants
...
...
...
...
...
...
...
...
...
Multiple
DCs
Multiple
end-users
Multiple
transport
paths
...
...
...
...
...
...
...
...
...
Multiple
time-periods
...
...
...
Production
alternatives
Production
cost
elements
...
...
...
...
...
...
...
...
...
Inventory
costs
Shortage/
penalty
costs
...
...
...
...
...
...
...
...
Using the
approximation of
steady state
distributions of key
random variables
A MIP model solved
using Lagrangian
heuristic and sub
gradient optimisation
A hierarchical PD
planning approach
A hybrid
analytic-simulation
approach using linear
program, General
Algebraic Modelling
System and ARENA
simulation package
A MIP model solved
with CPLEX
A MILP and using a
Lagrangian approach to
decompose the
problem into
sub-problems
A MILP model solved
using a multi-objective
GA
A hybrid
mathematicalsimulation
approach
Methods applied
...
...
...
...
...
TCM
Kanyalkar and
Adil, 2008
TCM
Gen and Syarif,
2005
...
...
X
...
...
...
...
...
...
...
...
...
MO
...
...
...
X
...
...
...
...
...
PM
Multiple
manuf.
plants
Multiple
product
types
TCM: total cost
minimisation
PM: prot
maximisation
MO: multiple
objectives
Table 3
Classication of literatureCategory 3.
Multiple
machine
centres
Stack
buffers
in
plants
Multiple
DCs
Multiple
end-users
Multiple
transport
paths
Multiple
time-periods
Production
alternatives
Production
cost
elements
Inventory
costs
Shortage/
penalty
costs
Methods applied
A linear programming
approach
Analysing different
mathematical models
for different scenarios
Solving a PD LPM
using spanning
tree-based hybrid
genetic algorithms and
fuzzy logic controller
(FLC)
A linear mathematical
formulation solved
using GLPK solver
the direct/indirect transportation of products from plants to endusers, and also taking into consideration the detailed production
cost elements for every single product could considerably increase
the complexity of the developed model by Liang.
A fuzzy mathematical programming based approach was proposed by Bilgen [73] to solve an integrated PD planning problem
incorporating multiple production lines, multiple plants and multiple DCs. The model was rst formulated using MILP and three
FMIP models (corresponding to different aggregation operators)
were further developed to facilitate the embodied uncertainty
factors and fuzziness of constraints, objectives and parameters.
Although the proposed model introduces the inclusion of such
realistic factors as production lines in manufacturing plants, many
characteristics of a real world model are disregarded in this study
(refer to summary Table 4).
A fuzzy production planning model integrating procurement
and distribution plans was developed by Torabi and Hassini [74]
incorporating four objectives simultaneously: (1) minimisation of
total cost of logistics, (2) maximisation of total purchasing value,
(3) minimisation of defective items, and (4) minimisation of late
deliveries. The initial model was formulated using a multi-objective
MILP. To capture the inherent fuzziness of the critical data and
the imprecise nature of the objectives aspiration levels, an interactive fuzzy goal programming formulation was proposed which
was then converted into an auxiliary crisp formulation for nding
a compromise solution. This study is the extension of the authors
previous work, in which a fuzzy single-plant bi-objective possibilistic programming model was proposed to formulate a SC master
production schedule [75]. The proposed models, however, aim to
incorporate the decisions at a tactical level (i.e. mid-term SC planning) and do not include the operational decisions at production
stage as appears in an aggregate production plan. Further, endusers were not considered in these models as a SC node and hence
the transportation issues were only considered up to the DC level.
Table 4 compares the characteristics of the models in Category
4.
3.5. Multiple-product, multiple-plant, multiple-warehouse,
multiple-end user, single-transport path models
An industrial PD planning problem was studied by DhaenensFlipo and Finke [52] proposing a MILP for the formulation of the
model and using CPLEX commercial linear programming codes as
the solver. In this study multiple states and lines are considered
in each production facility each dedicated to the production of a
certain product. However, multiple machine centres in the production line of each product, stack buffers at manufacturing plants,
backlogging costs, detailed production cost elements and production/distribution alternatives, all the characteristics of a complex SC
system, were not taken into consideration in the proposed model.
Chen and Lee [76] investigated the simultaneous optimisation
of multiple objectives in a typical SC with uncertain product prices
under market demand uncertainties. Demand uncertainty is modelled as discrete scenarios with given probabilities for different
expected outcomes. Uncertainties are described as fuzzy variables.
The model is constructed using Mixed Integer Nonlinear Programming (MINLP) to achieve conicting objectives. To nd the degree
of satisfaction of the multiple objectives, a fuzzy decision-making
method is proposed, where the nal decision is acquired by fuzzy
aggregation of the fuzzy goals and the fuzzy product prices, and
the best compromised solution is derived by maximising the overall
degree of satisfaction for the decision. Although a multiple-product
model is developed in this study, every plant batch-manufactures
only one single product at one period. Also, detailed production
aspects at each plant (e.g. considering capacity of machine centres
and stack buffers, and outsourcing opportunities) and the direct
10
Table 4
Classication of literatureCategory 4.
Author(s), year
TCM
Tasan, 2006
TCM
Kanyalkar and
Adil, 2005,
2007, 2008
TCM
TCM
Liang, 2008
TCM
Bilgen, 2009
TCM
Torabi and
Hassini, 2009
MO
Multiple
manuf.
plants
Multiple Stack
machine buffers
in plants
centres
Multiple
DCs
...
...
...
...
...
...
...
...
...
...
...
...
Multiple
end-users
Multiple
transport
paths
Multiple
time-periods
Production
alternatives
Production
cost
elements
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
Inventory
costs
Shortage/
penalty
costs
...
...
...
...
...
...
...
...
...
...
Four linked,
approximate
sub-models
heuristically optimised
using hierarchical
decomposition
approach
A non-linear
mathematical model
solved using a
two-layer
decomposition
solution approach.
A MIP model solved
using GAs
A mixed integer linear
goal programming
model solved
heuristically using
weighted and
pre-emptive methods
A linear mathematical
model solved using
GAs
A fuzzy two-objective
mathematical
programming model
with piecewise linear
membership function
A MILP model
equipped with three
FMIP models
accommodating the
embodied uncertainty
factors
A multi-objective fuzzy
goal programming
formulation solved
through an auxiliary
crisp formulation
Methods applied
Multiple
product
types
11
our knowledge, the sole paper that could t in this category is the
study conducted by Fahimnia et al. [86]. Based on the integration of
Aggregate Production Plan and Distribution Plan, the authors developed a MILP for a two echelon SC considering several real world
variables and constraints. GA was used for the optimisation of the
developed model and numerical results were presented for a real
world medium size case problem. The authors failed to test the
proposed approach on solving large-scale case problems. Table 7
summarises the characteristics of the sole model in this category.
4. Solution-based classication
For a complex realistic PD planning problem, the size of the
search space could become extremely large. In a real-life scenario
hundreds of types of products may be manufactured in a set of
manufacturing plants and the nal products distributed to several
end-users via a number of warehouses. In such cases, the search
space for nding the optimal PD plan may contain thousands of
discrete planning options. For this reason, selecting an effective
optimisation technique for solving a complex real life SC optimisation model is so vital and has always been a real challenge in past
research [26].
The survey on the current literature indicates that many techniques have been proposed for the optimisation of an integrated
PD plan. Each of these techniques has its own strengths and weaknesses and can be helpful in solving certain types of PD planning
problems. Table 8 summarises the solution approaches used in
previous models to solve PD planning problems. These proposed
solution techniques can be classied into four categories: mathematical techniques, heuristics techniques, simulation, and GAs.
4.1. Mathematical techniques
Mathematical techniques include linear programming, nonlinear programming, mixed integer programming, and Lagrangian
relaxation [8789]. Different mathematical techniques have
been adopted to solve SC problems. These include Linear
Programming models [6467,72], Mixed Integer Programming models [22,46,50,52,54,58,62,73,76,81,8385,9093], and Lagrangian
Relaxation models [2,59,94,95].
Mathematical programming models have been demonstrated to
be useful analytical tools in optimising decision-making problems
such as those encountered in SC planning [96,97]. Linear programming (LP) is applicable when all of the underlying models of the real
world processes are linear [89,98]. MIP is used when some of the
variables in the model are real values (fractional values) and others
are integer values (0, 1). MILP occurs when objective function and
all the constraints are in linear form, otherwise it is called MINLP
which is much harder to solve [88]. The idea behind the Lagrangian
relaxation methodology is to relax the problem by removing the
constraints that make the problem hard to solve, putting them into
the objective function, and assigning a weight to each constraint
[99]. Each weight represents a penalty which is added to a solution
that does not satisfy the particular constraint. All these techniques
are fully matured and thus guaranteed to produce the optimal solution or near optimal solutions for a certain type of problem [26].
There are two issues that restrict the application of mathematical modelling in solving complex real world SC planning problems:
1. Mathematical equations are not always easy to formulate, and
the associated complexities in the development of mathematical algorithms increase as the number of constraints increases
[26,100]. Since most of the realistic SCs are complex in nature
with a high number of variables and constraints involved, mathematical optimisation methods such as LP and MIP may not be
12
Table 5
Classication of literatureCategory 5.
Author(s), year
MO
TCM
PM
MO
Kazemi, et al.,
2009
TCM
Das and
Sengupta, 2009
MO
Yimer and
Demirli, 2009
TCM
Multiple
manuf.
plants
Multiple Stack
machine buffers
centres in plants
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
Multiple
DCs
Multiple
end-users
Multiple
transport
paths
...
...
...
...
...
...
...
...
Multiple
time-periods
Production
alternatives
Production
cost
elements
Inventory
costs
Shortage/
penalty
costs
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
A MILP formulation
solved with CPLEX
A MINLP and a fuzzy
decision-making
method to nd the
degree of satisfaction
of multiple objectives
A mathematical model
solved using a supply
chain simulation
optimiser (SCA)
A fuzzy programming
model solved using
GAs
A multi-objective
linear programming
model solved with a
Fuzzy mathematical
programming
approach
Comparing the
performance of a
GA-based multi-agent
approach with the
Lagrangian relaxation
app.
A two-level
mathematical model
solved with LINGO
A GA based solution
procedure is compared
with the performance
of mathematical
techniques
Dhaenens-Flipo
and Finke,
2001
Chen and Lee,
2004
Multiple
product
types
Methods applied
Table 6
Classication of literatureCategory 6.
Author(s), year
PM
TCM
PM
Multiple
manuf.
plants
Multiple Stack
machine buffers
centres in plants
...
...
...
...
...
Multiple
DCs warehouses)
Multiple
DCs
Multiple
transport
paths
Multiple
time-periods
Production
alternatives
Production
cost
elements
Inventory
costs
Shortage/
penalty
costs
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
A mathematical model
solved using CPLEX
A MILP model
implemented using
GAMS/CPLEX
A MINLP model solved
using GAMS/DICOPT
Table 7
Classication of literatureCategory 7.
Author, year
Fahimnia et al.,
2011
TCM
Methods applied
Multiple
product
types
Multiple
manuf.
plants
Multiple Stack
machine buffers
centres in plants
Multiple
DCs warehouses)
Multiple
DCs
Multiple
transport
paths
Multiple
time-periods
Production
alternatives
Production
cost
elements
Inventory
costs
Shortage/
penalty
costs
Gunnarsson
et al., 2007
Ferrio and
Wassick, 2008
Multiple
product
types
Methods applied
13
14
Table 8
Techniques and tools used for the development of PD optimisation models.
Techniques/tools
Mathematical techniques
Linear programming
Lagrangian relaxation
Heuristic techniques
Authors
Chen and Wang (1997)
Kanyalkar and Adil (2005, 2007, 2008)
Liang (2008)
Haq et al. (1991)
Mohamed (1999)
Dhaenens-Flipo and Finke (2001)
Yan et al. (2003)
Bhutta et al. (2003)
Chen and Lee (2004)
Demirli and Yimer (2006)
Rizk et al. (2006)
Gunnarsson et al. (2007)
Paksoy et al. (2007)
Tsiakis and Papageorgiou (2008)
Kim et al. (2008)
Ferrio and Wassick (2008)
Selim et al. (2008)
Hamedi et al. (2009b)
Das and Sengupta (2009)
Bilgen (2009)
Barbarosoglu and Ozgur (1999)
Jayaraman and Pirkul (2001)
Syam (2002)
Nishi et al. (2007)
Cohen and Lee (1988)
Pyke and Cohen (1993, 1994)
Ozdamar and Yazgac (1999)
Yeh (2005)
Yilmaz and Catay (2006)
Coronado (2008)
Tang and Yung (2004)
Simulation
Genetic algorithms
15
16
heuristics techniques for handing real world optimisation problems [60,70,80,86,126,129]. There is still a need to further extend
the effectiveness of the existing solution approaches and to test
the new arrivals such as Ant Colony Optimization (ACO) and Bee
Colony Optimization (BCO) techniques.
The rapidly increasing number of SC participants requires
academics and practitioners to pay special attention to SC ownership and power domination issues. Modern SCs generally
consist of several entities with pre-existing locations, capacity
limitations and intellectual properties. This calls for facilitating inter-organisational collaboration which involves sharing
common goals, prots, information, expertise, resources, and
experience. Although generally there might not be a sole leadership involved in the modern SCs, in some cases, one or more
participant(s) in the chain may have the dominant power over
one or more other participants. Overall, future research needs to
study the increasing complexity of SC ownership and investigate
the impact of power domination issues on the SC strategies at
tactical and operational levels.
6. Conclusions and directions for future research
Over the last two decades, the signicance of PD planning and
optimisation at tactical and operational levels has been recognised
by academics and practitioners as a competitive advantage for the
growing production/distribution rms. An integrated PD plan covers the planning of activities in a vast scope from raw material
suppliers to manufacturers and warehouses through to the endusers. This large planning scope with multiple chain players makes
the PD planning problem a complex problem with several decision variables and constraints. This paper reviewed the state of the
art in optimisation modelling of PD plan. We classied the current
literature into seven categories based on the degree of complexity.
This classication could be of potential value to future researchers
in the eld and is also capable of further renements. A second
classication was also presented in the paper based on the solution
techniques used for tackling the proposed integrated PD planning
problems.
Despite the growing interest in PD planning and optimisation,
there are still several real world planning problems which have
remained unaddressed. We encourage academics to investigate the
SC planning problems which may now only concern practitioners.
Our ndings have some important implications for SC planners and
suggest the following directions for future research in the area.
Apart from some sector specic studies, most of the former PD
planning models are only the oversimplication of real world scenarios (principally due to the actual complexities of SC plans). A
realistic range of variables and constraints needs to be incorporated in future PD models.
One perennial concern is the development of appropriate solution approaches for tackling large real world PD planning
problems. Various solution techniques have been used to deal
with small and medium size PD planning problems ranging
from mathematical models, heuristics, simulation, and knowledge based system, to the latest fuzzy programming and GAs.
However, nding the optimal solution in a large real world PD
planning problem using simplistic techniques is impossible or
subject to heavy computing overheads. Some approaches which
might be able to handle large problems are not able to prove the
optimality of the solutions found or do not have the potential to
nd the optimal solution on their own. Hence, there is a need
to further extend the effectiveness of the existing solution techniques to be capable of handling realistic PD planning problems
with large numbers of variables and constraints.
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