Cross-facility production and transportation planning problem with perishable inventory

Abstract

This study addresses a production and distribution planning problem in a dynamic, two-stage supply chain. This supply chain consists of a number of facilities and retailers. The model considers that the final product is perishable and therefore has a limited shelf life. We formulate this problem as a network flow problem with a fixed charge cost function which is NP-hard. A primal-dual heuristic is developed that provides lower and upper bounds. The models proposed can be used for operational decisions. © Springer-Verlag Berlin Heidelberg 2006.