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Heuristic for Distribution Planning in Capacitated Multi-echelon Supply Chains  

Kwon, Ick-Hyun (Research Institute for Information and Communication Technology, Korea University)
Shin, Hyun-Joon (Department of Industrial Information and Systems Engineering, Sangmyung University)
Kim, Sung-Shick (Department of Industrial Systems and Information Engineering, Korea University)
Publication Information
IE interfaces / v.19, no.2, 2006 , pp. 124-132 More about this Journal
Abstract
The system under study is a single item, multi-echelon distribution system with a capacitated production facility. All the nodes at the downstream ends are demand-sites, i.e., ordered items are delivered to the customers from the node. Also any transshipment depots in the midstream can be demand-sites as well. For a given planning period, at each of demand-site, demand is forecasted and known. Our objective is to minimize the average system cost per period which is the sum of holding and backorder costs in the entire network. Due to the capacity restrictions, it is difficult to establish efficient distribution planning. To overcome such a difficulty and obtain a reasonable and better solution, we convert this problem into a single machine earliness and weighted tardiness scheduling. We propose a simple but cost-effective heuristic for this problem. The experimental results showed that the proposed heuristic obtained much better solutions compared with another approach.
Keywords
multi-echelon; capacitated supply chain; heuristic; distribution planning;
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