A New Solution Approach to the Integrated Production and Distribution Problem: A Mathematical Modeling

Production and distribution activities are two basic elements in supply chain management. In literature, these problems are generally considered separately. However, it is clear that both activities have to be handled simultaneously in order to provide less system cost. Hence, enterprises are made their decisions concurrently with regard to production and distribution decisions for sustainable competitiveness. Based on this necessity, production and distribution problems have recently started to be studied together. In this paper, we first deal with production problems, reducing it to the unrelated parallel machine environment and a mathematical model is proposed. Then, we put an emphasis on the vehicle routing problem which is a strong connection with distribution decisions and develop another model. Finally, a new mathematical model formulation solving two integrated problems is developed and an illustrative example is given to validate the mathematical model.