Joint Optimization of Production Planning and Vehicle Routing Problems: A Review of Existing Strategies

Abstract

Keen competition and increasingly demanding customers have forced companies to use their resources more efficiently and to integrate production and transportation planning. In the last few years more and more researchers have also focused on this challenging problem by trying to determine the complexity of the individual problems and then developing fast and robust algorithms to solve them. This paper reviews existing literature on integrated production and distribution decisions at the tactical and operational level, where the distribution part is modelled as some variation of the well-known Vehicle Routing Problem (VRP). The focus is thereby on problems that explicitly consider deliveries to multiple clients in a less-than-truckload fashion. In terms of the production decisions we distinguish in our review between tactical and operational production problems by considering lot-sizing/capacity allocation and scheduling models, respectively.

Integrating production scheduling and vehicle routing decisions at the operational decision level: A review and discussion

“…However, an increasing trend can be observed to reduce these intermediate buffer stocks to utilize resources more efficiently (Chang & Lee, 2004;Reimann et al, 2014) and to survive in the globalized economy.…”

“…Integrating production and routing decisions into a single decision support model can be useful to avoid inefficiencies in the determined schedules (Geismar et al, 2008), which can result in higher operational costs, lower customer service level, or poor utilization of the resources (Gao et al, 2015). In order to achieve a high performing overall system and to satisfy customers expectations, extensive coordination among the different stages in the supply chain is necessary (Reimann et al, 2014). Moreover, larger savings can be achieved by integrating rather than by improving individual functions themselves (Chen, 2004).…”

“…A review of integrated problems at the strategic and tactical level can be found in Vidal & Goetschalckx (1997) and Díaz-Madroñero et al (2015), respectively. Even though approximately 20 years ago Thomas & Griffin (1996) remarked the scarcity of literature concerning coordinated operational level problems, machine scheduling and distribution decisions are still too often considered independently of each other (Chen, 2010;Reimann et al, 2014;Wang et al, 2015). In order to integrate operational level production and delivery problems, the classical VRP needs to be integrated with production scheduling issues.…”

“…In this sample, only a minority of the studies make use of a VRP. Reimann et al (2014) only review integrated studies in which vehicle routing decisions are included, both at the tactical and operational level.…”

A Hybrid Dynamic Programming for Solving Fixed Cost Transportation with Discounted Mechanism

“…The other attempt is the work of Reimann et al [22] that reviewed existing literature on integrated production and distribution decisions at the tactical and operational level. The focus was thereby on problems that explicitly consider deliveries to multiple clients in a less-than-truckload fashion.…”