Thesis Open Access

Minimum Cost Production and Transportation Plan

Mesfin Diro Chaka; Berhanu Guta(PhD)

In this paper, two models of production and transportation planning problems are presented. We formulate these problems as a minimum cost network flow problem for multi-commodity with some positive lower bounds on arcs. This formulation is different from generic multi-commodity flow. At first, network flow problem is discussed in strategic decision level which will be used later to solve network flow problem at tactical decision level. This supply chain consists a number of facilities and retailer centers. The first model considers production and transportation costs as linear where as the second problem use the costs of production and transportation as piece-wise concave. The objective of the integrated model is to minimize the total production and transportation cost. The integrated model is solved by Network Simplex Method. The formulated model can be used for planning decisions to integrate supply chain functions.

Presented on 26 06 2013
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