Dual problem formulation and its application to optimal redesign of an integrated production–distribution network with structure dynamics and ripple effect considerations

Abstract

In this paper, a dual problem formulation is developed in order to solve a multi-objective, multi-period and multi-commodity production–distribution (re)planning problem for a multi-stage centralised upstream network with structure dynamics considerations. The original idea of this study is to use the real logic of decision-making in companies and exclude demand constraint from the linear programming (LP) model. This allows transit from the classical transportation problem, formulated as an LP model in order to improve service level at the strategic inventory holding point. The formulation as an LP model makes it possible to formulate the dual problem. The performed structural analysis revealed some interesting managerial insights into building robust distribution plans and interconnecting decisions on distribution network design, planning, and sourcing.