A GLOBAL PRODUCTION PLANNING MODEL WITH CONSIDERATION OF MARINE TRANSPORTATION FACTORS

In previous studies regarding production-distribution problems, sales planning was not considered and transportation processes were simplified. Such non-consideration and simplification can lead to decreased profits, since both sales planning and distribution directly influence production planning. Therefore, the present study develops a global production planning model that integrates production and sales planning, while considering marine transportation factors (hub selection) as decision variables in order to optimize global production planning. Since the proposed model is a nonlinear problem with a nonconvex objective function and nonlinear constraints, the model was remodified into a mixed-integer linear problem so that it could be solved with an optimization solver (IBM CPLEX 12.6). Moreover, computational experiments were conducted and manufacturing and sales planning were integrated to determine the potential profits of improving vessel load efficiency. The findings show that, under different manufacturing or transportation environments, the hub selection approach showed a variance in total profits, compared with the hub predefined approach. More specifically, when the proportion of transportation costs increased, the importance of using the hub selection approach was greater, since it helped determine the potential profits by utilizing various marine transportation factors.