Elton G. Yates Distinguished Professor of Industrial Engineering Louisiana State University
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A supply chain system that operates under Just-in-time (JIT) production facility consists of raw material suppliers, manufacturers, and retailers. This paper considers the concept where the production of finished goods in one cycle starts immediately after the production or uptime in preceding cycle in the production facility. Considering this scenario and manufacturers’ point of view, a supply chain model of raw materials and finished goods supply is developed for multiple suppliers and multiple retailers. In this case the raw materials are supplied by different suppliers in instantaneous replenishments, and the finished goods are supplied to multiple retailers in a fixed amount after a fixed interval of time according to retailers’ demand. The problem in this research is formulated as an integer non-linear programming problem and heuristic solutions are developed to solve it with the help of integer approximations and a divide-and-conquer technique. The solution methodologies suggested lead to estimates of optimum production quantity and minimum total system cost. The solutions are tested through numerical examples. Also, this research proposes an alternate delivery schedule of finished product supply, for which both manufacturers and retailers will be benefited economically.