Integrated Production Lot Size and Distribution Planning with Shared Warehouses

Abstract

Collaboration in supply chains (SCs) is steadily improving especially due to advanced information systems that provide transparency over resource allocation, utilization, and dynamic demands. We are examining the case of shared inventory spaces in SCs where utilization of storage spaces depend on all SC partners. Decisions that need to be made are when to produce how much of multiple products and where and how long to store them in order to fulfill known customer demands. Therefore, we take production, inventory control and placement, as well as distribution (logistics) decisions into consideration. Special emphasis is made on setup considerations for detailed production sequencing. We analyze this integrated approach that leads to reduced overall SC costs and extends the literature to the view of shared resources that become increasingly prominent with the developments of Industry 4.0. solutions.