Global production planning considering 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 a decrease in profits since both sales planning and distribution directly influence production planning. Therefore, this paper develops a global production planning model that integrates production and sales planning while considering marine transportation factors (hub selection) as decision variables. Since the model proposed is a nonlinear problem with a nonconvex objective function and nonlinear constraints, it was reformulated into a mixed-integer linear problem so that it can be solved using an optimization solver. Moreover, computational experiments were conducted, and the findings show that, under different production or transportation environments, the hub selection approach realizes more profit compared to a predefined hub approach. Furthermore, scale effect in production and marine transportation processes have also been found in hub selection approach.