An unit cost adjusting heuristic algorithm for the integrated planning and scheduling of a two-stage supply chain

Abstract

Purpose: The stable relationship of one-supplier-one-customer is replaced by a dynamic relationship of multi-supplier-multi-customer in current market gradually, and efficient scheduling techniques are important tools of the dynamic supply chain relationship establishing process. This paper studies the optimization of the integrated planning and scheduling problem of a two-stage supply chain with multiple manufacturers and multiple retailers to obtain a minimum supply chain operating cost, whose manufacturers have different production capacities, holding and producing cost rates, transportation costs to retailers.

Design/methodology/approach: As a complex task allocation and scheduling problem, this paper sets up an INLP model for it and designs a Unit Cost Adjusting (UCA) heuristic algorithm that adjust the suppliers’ supplying quantity according to their unit costs step by step to solve the model.

Findings: Relying on the contrasting analysis between the UCA and the Lingo solvers for optimizing many numerical experiments, results show that the INLP model and the UCA algorithm can obtain its near optimal solution of the two-stage supply chain’s planning and scheduling problem within very short CPU time.

Research limitations/implications: The proposed UCA heuristic can easily help managers to optimizing the two-stage supply chain scheduling problems which doesn’t include the delivery time and batch of orders. For two-stage supply chains are the most common form of actual commercial relationships, so to make some modification and study on the UCA heuristic should be able to optimize the integrated planning and scheduling problems of a supply chain with more reality constraints.

Originality/value: This research proposes an innovative UCA heuristic for optimizing the integrated planning and scheduling problem of two-stage supply chains with the constraints of suppliers’ production capacity and the orders’ delivering time, and has a great practical significance to the dynamic relationship establishment of multi-supplier-multi-customer in current market.