Authors: K. Ratna Kumar; T. Radha Ramanan; R. Sridharan
Addresses: Mechanical Engineering Department, National Institute of Technology Calicut, Kerala – 673601, India ' School of Management Studies, National Institute of Technology Calicut, Kerala – 673601, India ' Mechanical Engineering Department, National Institute of Technology Calicut, Kerala – 673601, India
Abstract: The integrated procurement, production and distribution planning (IPPDP) problem consists of multiple suppliers who supply raw materials to multiple plants to produce a single product to meet the demand in multiple time horizons. The present research focuses on the analysis of the effect of backorders on the IPPDP problem in a three-echelon supply chain that consists of suppliers, manufacturers and retailers. The IPPDP problem is formulated as a mixed integer linear programming (MILP) model and the optimal solution is obtained with the solver LINGO. The total net profit obtained for the scenario involving lost sales is compared with that for the scenario which involves lost sales and backordering. For a set of problem instances, an increase of 10.29% in the average total net profit and 4.80% in the average fill rate is obtained for the lost sales and backordering scenario compared to the lost-sales-only scenario.
Keywords: integrated procurement; production and distribution; backordering; lost sales.
International Journal of Services and Operations Management, 2020 Vol.36 No.4, pp.403 - 424
Received: 20 Nov 2017
Accepted: 12 May 2018
Published online: 17 Aug 2020 *