What is Production-Distribution Problem

Supply Chain Management (SCM) is the process of planning, implementing and controlling the operations of the supply chain in an effective way. Part of the planning process consists of finding the best possible chain configuration. For manufacturing firms, a production-distribution problem consists of defining the flow of products from plants to clients (markets) via a set of warehouses. Defining the location of such warehouses is also part of the decision-making problem. This problem is known in the literature as the two-echelon uncapacitated facility location problem (TUFLP). This chapter analyses the performance of a mathematical model that minimizes the total cost of warehouse location and production and distribution. This problem is studied and is solved using optimization methods.