Distribution planning in supply chain management

Abstract

The work involves developing a simulation model and a heuristic for a distribution problem with fixed charge in a two stage supply chain. The work is extended to include an integrated supply chain taking into account both the capacity constrained production environment and two stage transportation distribution. In the first phase the paper aims at optimizing the transportation distribution problem using Genetic Algorithm (GA). In the second phase, a new algorithm -Combinatorial Search Algorithm (CSA) is proposed, which is used to find the optimum total cost of distribution. The results obtained using CSA are compared with the results obtained using GA. Sensitivity Analysis is carried out to observe the variation in distribution and the total cost as a function of fixed cost, variable cost and demand. After the optimization of the distribution problem, the optimization of supply at the plants concerned is undertaken, wherein significant improvement in total cost is achieved by relaxing the fixed-supply constraint existent in the original problem.