In this model, we find out the optimal amount of production alongwith optimal amount of movement of produced goods between three echelons in a supply chain: plants, warehouses and customers.
Model details: Given customer demands, we find out the optimum amount of each product that needs to be produced at each plant,
shipped to warehouses and then to customers to satisfy customer demands. The model considers inventory capacity at each warehouse, inventory (holding) cost at each warehouse, production cost at plants, shipment cost between various supply chain levels, and raw material cost.
Input required: - Sets: products, months, plants, warehouses, customer locations, vendors, and raw materials - Parameters (constants): - Final price of each product - Customer demand (per month, product and customer location) - Production cost (per product and plant) - Daily production rate (per product and plant) - Available production days (per month) - Inventory holding cost (per product and warehouse) - Inventory capacity, in product units (per warehouse) - Shipment costs: plant to warehouse - Shipment costs: warehouse to customer location - Raw material requirement (per product and raw material) - Raw material supply cost (per raw material, vendor and plant)