An integrated manufacturing and distribution model for a multi-echelon structure

A multi-echelon structure of manufacturing and distribution system in considered, where the raw materials are transformed into a finished good through a number to manufacturing echelons and it is distributed to the lower echelons(retailers, or customers). The raw material, work-in-process, finished good inventory and the distribution costs are unified into one model. The objective is to determine the ordering policy of raw materials, manufacturing lot size, the number of sub-batch and the distribution policy of the finished good which minimize the annual total system cost. A computer program for a heuristic search technique is developed, by which a numerical example is examined.