An integrated model for an industrial production-distribution problem

In this paper, we are interested in a multi-facility, multi-product and multi-period industrial problem. In this problem, both production and distribution costs are significant and they are inter-related. Therefore they should be considered simultaneously in a cost optimization problem. We model this combined production-distribution problem in the form of a network flow problem with relatively few additional 0-1 variables describing the linking constraints between periods. Computational experiments show that the real size problems we encountered can be solved in reasonable time using commercial linear programming codes like CPLEX.