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Design and Optimization of a Strategic Production-Distribution Model for Supply Chain Management: Case study of a plastic profile manufacturer in Turkey

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Author(s): Turan Pakoy | Hasan Kürsat Gules | Demet Bayraktar

Journal: Selçuk Journal of Applied Mathematics
ISSN 1302-7980

Volume: 8;
Issue: 2;
Start page: 83;
Date: 2007;
Original page

Keywords: Supply Chain Management | Production/Distribution System | Network Design and Optimization | Supply Chain Modeling | Mixed Integer Linear Programming.

ABSTRACT
Supply chain management concerns with the optimal flow of materials and knowledge through overall production and distribution system from raw material suppliers to the last customers. In this paper, supply chain system of a plastic profile manufacturer in Turkey is modeled as a multi-echelon mixed integer linear programming model. The model lets decision maker reflect his supply policy and also includes the choice of the facilities (plants or distribution centers (DCs)) to be opened and design of network configuration with minimum total cost. The total cost involves supply cost (combination of purchasing cost and shipping cost from suppliers); transportation costs between plants and DCs; distribution cost between DCs and customer zones; fixed operating costs; and opportunity cost not have the material at the right time. The developed model is solved by a professional software package and the computational results are discussed.
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