Title: A coordinated production planning model with capacity expansion for supply chain networks

Authors: Ming-Hua Lin; Jung-Fa Tsai; Pei-Chun Wang; Yu-Ting Ho

Addresses: Department of Urban Industrial Management and Marketing, University of Taipei, No. 101, Sec. 2, Zhongcheng Road, Taipei 11153, Taiwan ' Department of Business Management, National Taipei University of Technology, No. 1, Sec. 3, Chung-Hsiao E. Road, Taipei 10608, Taiwan ' Department of Business Management, National Taipei University of Technology, No. 1, Sec. 3, Chung-Hsiao E. Road, Taipei 10608, Taiwan ' Department of Business Management, National Taipei University of Technology, No. 1, Sec. 3, Chung-Hsiao E. Road, Taipei 10608, Taiwan

Abstract: Developing a flexible supply chain is important for enterprises to face market volatility and diversity. In order to satisfy order requirements under demand uncertainty, this study constructs a coordinated production planning model of supply chain networks considering production capacity expansion. Besides, the proposed model involves batch production that is commonly used in many companies. The constructed model is then linearised as a mixed-integer linear programming problem to guarantee global optimality. The solution of the reformulated model determines the optimal production, transportation and inventory levels as well as the optimal batch production operations and capacity expansion strategy. Several numerical experiments are conducted to demonstrate the effectiveness of the proposed method and the impacts of production capacity expansion on the operations of the supply chain. [Received: 27 November 2017; Revised: 13 August 2018; Accepted: 29 December 2018].

Keywords: supply chain management; coordinated production planning model; demand uncertainty; batch production; flexible production capacity; linear transformation; deterministic optimisation.

DOI: 10.1504/EJIE.2019.100917

European Journal of Industrial Engineering, 2019 Vol.13 No.4, pp.435 - 460

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 27 Jun 2019 *

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