Production-distribution planning in supply chain using a hybrid approach

Production-distribution planning is the most important part in supply chain management. To solve this integrated planning problem, either analytic or simulation approach have been developed. However, these two approaches have their own demerits in problem solving. In this paper, a hybrid approach is proposed which is a specific problem solving procedure combining analytic and simulation method to solve production-distribution problems in supply chain. To illustrate the modelling of the problem, a multiperiod, multiproduct, multishop production and distribution problem is considered in supply chain environment. The machine capacity and distribution capacity constraints in the analytic model are considered as stochastic factors and adjusted by the proposed specific process according to the results from independently developed simulation model which includes general production-distribution characteristics. Experimental results of the hybrid approach for the developed system show that more realistic solutions with respect to the analytic model reflecting stochastic nature of real systems are quite different from the initial analytic solutions.