Managing an external depot in a production routing problem

Abstract

This paper addresses a production and distribution problem in a supply chain. The supply chain consists of a plant with no storage capacity that produces only one type of product. The manufactured products are then transported to a depot for storage. Customers demand is met by a homogeneous fleet of vehicles that begins and ends their trips at the depot. The objective of the study is to minimize the overall cost of production, inventory and transport throughout the supply chain. A Branch-and-Cut and a hybrid Two Phases Decomposition Heuristic using a Mixed Integer Programming and a Genetic Algorithm have been developed to solve the problem.