Order Assignment and Scheduling in a Supply Chain

• Published in: Operations research Vol. 54; no. 3; pp. 555 - 572
• Main Authors: Chen, Zhi-Long, Pundoor, Guruprasad
• Format: Journal Article
• Language: English
• Published: Linthicum, MD INFORMS 01.05.2006; Institute for Operations Research and the Management Sciences
• Subjects: Algorithms; Analysis; Applied sciences; approximation/heuristic; Business orders; Delivery services; deterministic sequencing; Distribution of goods; Exact sciences and technology; Heuristic; Heuristics; integer; Inventory control, production control. Distribution; Logistics; Manufacturers; manufacturing; Operational research and scientific management; Operational research. Management science; Order processing; performance/productivity; Production costs; Production scheduling; programming; Scheduling; Shipments; Studies; Supply chain management; Supply chains; Total costs; transportation; Transportation costs; Performance evaluation; Ordered set; Worst case method; Processing time; Numerical method; Life cycle; Classification; Sequencing; Productivity; production/scheduling: approximation/heuristic; deterministic sequencing; manufacturing: Subject classifications: production/scheduling: approximation/heuristic; deterministic sequencing; manufa performance/productivity; transportation: scheduling; programming: integer; Assignment problem; Distribution cost; Service; and Supply Chain Operations; Scheduling; Order picking; algorithms; heuristic. Manufacturing; Computational complexity; Delivery lead time; Integer programming; Production management; Retailers; Heuristic method; Production cost; Asymptotic approximation; Logistics
• ISSN: 0030-364X; 1526-5463
• DOI: 10.1287/opre.1060.0280

We consider the supply chain of a manufacturer who produces time-sensitive products that have a large variety, a short life cycle, and are sold in a very short selling season. The supply chain consists of multiple overseas plants and a domestic distribution center (DC). Retail orders are first processed at the plants and then shipped from the plants to the DC for distribution to domestic retailers. Due to variations in productivity and labor costs at different plants, the processing time and cost of an order are dependent on the plant to which it is assigned. We study the following static and deterministic order assignment and scheduling problem faced by the manufacturer before every selling season: Given a set of orders, determine which orders are to be assigned to each plant, find a schedule for processing the assigned orders at each plant, and find a schedule for shipping the completed orders from each plant to the DC, such that a certain performance measure is optimized. We consider four different performance measures, all of which take into account both delivery lead time and the total production and distribution cost. A problem corresponding to each performance measure is studied separately. We analyze the computational complexity of various cases of the problems by either proving that a problem is intractable or providing an efficient exact algorithm for the problem. We propose several fast heuristics for the intractable problems. We analyze the worst-case and asymptotic performance of the heuristics and also computationally evaluate their performance using randomly generated test instances. Our results show that the heuristics are capable of generating near-optimal solutions quickly.