A MILP Model for Production and Distribution Planning in Consumer Goods Supply Chains

Summary

In the consumer goods industry there is often a natural sequence in which the various products are to be produced in order to minimize total changeover time and to maintain product quality standards. For instance, in the production of beverages, the final bottling and packaging lines determine the output rate of the entire production system. This type of production system is called “make-and-pack”. In this paper, a so-called block planning approach based on mixed-integer linear optimization modeling is presented which establishes cyclical production patterns for a number of pre-defined setup families.