Integrated Medium Term Supply Chain Model

1 Integrated Medium Term Supply Chain Model 

A model for a more general supply chain structure and requirement will be introduced to illustrate medium range integrated planning and scheduling in supply chains. The model is adopted from Kreipl and Pinedo [5]. 

Consider a supply chain of three levels in series shown in Fig. 3.10. The first and most upstream level (Level 1) has two factories in parallel producing two major products, FI and F2, in full production capacity of 168 h (24 x 7) a week. They both feed a distribution center (DC) in Level 2 and deliver to a common customer in Level 3. Products can also be delivered to the customer by the distribution center. Both factories have no room for finished goods storage and the customer does not want to receive any early deliveries. The medium term planning production timing and quantities that minimizes the total cost of production cost, storage cost, transportation cost, tardiness cost for the whole supply chain over a 4 week time horizon, (the unit of time being one week). The transportation time from any one of the two factories to the DC, firom any one of the two factories to the customer, and from the DC to the customer all transportation times are assumed to be identical and equal to one week. 

Xijii number of units of product j produced at plant k during period i yijki number of units of product j transported from plant k to the DC in week i yijiii number of units of product j transported from plant k to customer in week i Zij number of units of product j transported from the DC to the customer in week i 

V4j2 number of units of product j that have not been delivered to the DC by the end of the planning horizon (the end of week 4) vq/3 the number of units of product j that are tardy at the customer at time 0 Vy3 number of units of product j that are tardy at the customer in week i 

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