The distribution planning process in a supply chain with multiple transportation strategies

This paper compares different approaches to solve the distribution planning process problem with distribution strategy choice in supply chains, encompassing several production plants and several regional warehouses that fulfill a set of retail customers with several references. The problem has been tackled considering two different perspectives: the former is more empirical, providing a heuristic solution (Empirical model) of the problem, while the latter is based on a mixed integer linear programming model (Analytical model). The paper discusses the computational results obtained by applying the aforementioned approaches in terms of costs, optimality gap and computational time to the food supply chain of an Italian subsidiary of a German group encompassing 2 production plants located in Germany, 2 regional warehouses situated in Italy, that fulfill 200 retail customers with 19 references. In addition to the computational results that provide a comparison among the solution applied by the company (Rule of thumb), the Empirical model and the Analytical model, managerial insights are underlined, in terms of applicability of the best approach within the specific company context