Synchronizing inventory and transport within supply chain management

The practical problem considers synchronized optimization of inventory and transport,and focuses on producer-distributor relations. A producer has signed a contract with a distributor that guaranties exclusivity for sales in a certain region/country. Given a region/country with its road network, historical data about sales, and all relevant costs (facilities, vehicles, workers, and haulage), it should be provided a way for a distributor to organize his sales/distribution network. Since goods are owned by the distributor as soon as they leave production facility,and since stock out results in lost sales, the distributor’s cash flow highly depends on inventory control. Given sales forecasts, should be found methods how the producer can manage its inventories. Finally, some suggestions about contracting models that lead to more profitable supply chains should be given.