Determination of production lot size and DC location in manufacturer DC retailer supply chains

Efficiency and responsiveness of global supply chains can no longer be achieved through isolated logistics systems or just production systems. This paper is inspired by an industry project to balance the design, schedule and cost of the production and logistics for a major apparel manufacturer. We model the supply chain as a Manufacturer‐DC‐Retailer system and explicitly incorporate the interplay between the logistics configuration and production control to support the total optimisation. The analytical and numerical results suggest that the proper co‐design of the production and logistics systems could achieve significant cost saving.