Production and distribution planning model for hinterland supply chain

The overall focus of this research is to address a supply, manufacturing, shipping and distribution problem faced by a company that manages a hinterland supply chain to meet customers´ annual independent demand. The problem involves the delivery of products from raw materials purchasing to delivery of the finish goods to destination distribution centres. Since the annual products independent demanded by customers are fixed, the manufacturing and shipment planning are of great economic importance. This problem is formulated as a mathematical model. The objective function seeks to minimize the total cost including the purchasing, manufacturing, transportation and inventory costs. When this model is resolved, the interval period of incoming raw materials delivery can be determined at the minimal total cost. Some results are discussed under special circumstances.