A Supply Chain Operations Lot-Sizing and Scheduling Model with Alternative Operations

Abstract

The aim of this paper is to propose an mixed integer linear programming (MILP) model for operations lot-sizing and scheduling (assignment and sequencing) in the supply chain of an international company which produces and delivers customized products through several geographically distributed assembly plants. The model schedules the purchase of raw materials in the various plants considered, the transshipments, shipments to customers and the various operations to assemble the product. The model considers different alternative production operations such as product substitution (upgrading), alternative procurement and transport operations. It also addresses the different lead times associated with these operations. Specific constraints such as space availability on each plant and workforces are contemplated. A novel approach based on the stroke concept is applied to the MILP model to model alternatives.