Joint optimization of production planning and vehicle routing problems: A review of existing strategies

Keen competition and increasingly demanding customers have forced companies to use their resources more efficiently and to integrate production and transportation planning. In the last few years more and more researchers have also focused on this challenging problem by trying to determine the complexity of the individual problems and then developing fast and robust algorithms to solve them. This paper reviews existing literature on integrated production and distribution decisions at the tactical and operational level, where the distribution part is modelled as some variation of the well-known Vehicle Routing Problem (VRP). The focus is thereby on problems that explicitly consider deliveries to multiple clients in a less-than-truckload fashion. In terms of the production decisions we distinguish in our review between tactical and operational production problems by considering lot-sizing/capacity allocation and scheduling models, respectively.