Production Allocation and Distribution for Bottled Water Manufacturing

Abstract

This paper studies the production allocation and distribution process of a bottled water manufacturing in Thailand. The case study company has 16 products that produced by 6 manufacturing plants located in the different regions. There are different production costs in each plant and also different transportation costs from plants to the distribution centers, while the selling price of the same product is not different. Each plant can produce different types of products by sharing resources; furthermore, each production line uses the different setup time for changing products. This research proposes a mixed integer programming (MIP) model to minimize the total cost, including production cost, holding cost and transportation cost. Results from the proposed model help reduce company cost 24.77%.