An integrated production-inventory-distribution model for manufacture of urea: A case

This paper presents the application of an integrated production-inventory-distribution model incorporating many realistic conditions such as set-up time and cost, lead times, losses during production and distribution and recycling of production losses as well as backlogging. A mixed-integer-programming formulation to minimize total system cost is formulated. A case study of large public sector organization manufacturing urea fertilizer is reported using the model. Adoption of the proposed model to the case study reported is outlined. The model enables to determine optimal production and distribution quantities through various channels as well as optimal inventory levels at various production stages and warehouses over a six-month planning period. The results obtained are explained and important insights gained are reported.