Title: Determination of production lot size and DC location in manufacturer–DC–retailer supply chains

Authors: Hongyan Dai, Mitchell M. Tseng

Addresses: Department of Industrial Engineering and Logistics Management, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong. ' Department of Industrial Engineering and Logistics Management, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong

Abstract: Efficiency and responsiveness of global supply chains can no longer be achieved through isolated logistics systems or just production systems. This paper is inspired by an industry project to balance the design, schedule and cost of the production and logistics for a major apparel manufacturer. We model the supply chain as a Manufacturer-DC-Retailer system and explicitly incorporate the interplay between the logistics configuration and production control to support the total optimisation. The analytical and numerical results suggest that the proper co-design of the production and logistics systems could achieve significant cost saving.

Keywords: production lot sizing; distribution centres; warehouse locations; logistics configurations; economies of scale; shipment distances; SCM; supply chain management; efficiency; responsiveness; global supply chains; globalisation; production systems; apparel manufacturing; clothing industry; production costs; scheduling; retailers; retail trade; clothes manufacturers; production control; total optimisation; system co-design; cost savings; logistics systems; logistics management.

DOI: 10.1504/IJLSM.2011.038988

International Journal of Logistics Systems and Management, 2011 Vol.8 No.3, pp.284 - 297

Published online: 30 Apr 2015 *

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