Integrated multi-factory production and distribution scheduling applying vehicle routing approach

This paper introduces a new integrated multi-factory production and distribution scheduling problem in supply chain management. This supply chain consists of a number of factories joined together in a network configuration. The factories produce intermediate or finished products and supply them to other factories or to end customers that are distributed in various geographical zones. The problem consists of finding a production schedule together with a vehicle routing solution simultaneously to minimise the sum of tardiness cost and transportation cost. A mixed-integer programming model is developed to tackle the small-sized problems using CPLEX, optimally. Due to the NP-hardness, to deal with medium- and large-sized instances, this paper develops a novel Improved Imperialist Competitive Algorithm (IICA) employing a local search based on simulated annealing algorithm. Performance of the proposed IICA is compared with the optimal solution and also with four variants of population-based metaheuristics: Imperialist Competitive Algorithm, Genetic Algorithm, Particle Swarm Optimisation (PSO), and Improved PSO. Based on the computational results, it is statistically shown that quality of the IICA’s solutions is the same as optimal ones solving small problems. It also outperforms other algorithms in finding near-optimal solutions dealing with medium and large instances in a reasonably short running time.