An integrated production and distribution problem with direct shipment: A case from Moroccan bottled-water market

Abstract

We consider an industrial application encountered in the Moroccan context that involves the production and distribution of bottled water. Our industrial partner owns one plant from which all requests are delivered in direct shipments and usually full truckloads to the customers (a set of regional depots and wholesalers). We must take into account the production, the delivery requirements, multiple products, and inventory levels. The objective is to minimise the sum of the production, transportation, and inventory costs. We propose a mixed integer linear program for a variant of the multi-vehicle, multi-product production routing problem. Experiments have been conducted using CPLEX 12.3.0, and almost all instances were solved with a reasonable optimality gap. The results show that significant savings can be obtained by using our approach with respect to the current company practice.