An integrated production-distribution model for a multi-national company operating under varying exchange rates

Research modeling the production planning and logistics decisions for multi-national companies (MNC's) operating under varying inflation and exchange rates is scanty. Decisions regarding the products to be made in different facilities, and the markets which these facilities would serve are critical to the MNC's success. Also, decisions regarding when to open, retain, and close facilities are equally important. These decisions are sensitive to both inflation and exchange rates. Accordingly, we incorporate these parameters in the development of an integrated production planning and distribution model for an MNC. We elicit the performance of the model through examples. Our results indicate profit reduces by as much as 45.77% depending on the exchange rates, initial capacities, and restrictions imposed on the more profitable facility. (C) 1999 Elsevier Science B.V. All rights reserved.