Production-Distribution Planning with Fuzzy Costs

In a competitive market environment agility (flexibility and responsiveness) is a crucial strategic issue for manufacturing systems in order to broaden their market share. Adopting a BTO strategy would allow firms to effectively customize their products to a greater degree towards meeting specific customer requirements, and also it entails large cost savings by reducing raw material, WIP and finished good inventories while improving production flexibility. In this paper, we propose an integrated production-distribution planning model for a build-to-order supply chain (BOSC) with uncertain cost parameters. The BOSC scheduling model is constructed as a mixed integer fuzzy programming (MIFP) problem with a goal of reducing the overall operating costs related with component fabrication, procurement, assembling, inspection, logistics and inventory while improving customers satisfaction by allowing product customization and meeting delivery promise dates at each market outlet. An efficient compromise solution approach by transforming the problem to an auxiliary multi-objective linear programming model is also suggested