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CentralizedVERSUSdecentralized productionplanning

Published online by Cambridge University Press:  12 October 2006

Georgios K. Saharidis ,
Yves Dallery  and
Fikri Karaesmen
Georgios K. Saharidis
Affiliation:
Laboratoire Génie Industriel, École Centrale Paris, Grande Voie des Vignes, 92295 Chatenay-Malabry Cedex, France; e-mail:
Yves Dallery
Affiliation:
Laboratoire Génie Industriel, École Centrale Paris, Grande Voie des Vignes, 92295 Chatenay-Malabry Cedex, France; e-mail:
Fikri Karaesmen
Affiliation:
Department of Industrial Engineering, Koç University, 34450 Istanbul, Turkey; fkaraesmen@ku.edu.tr
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Abstract

In the course of globalization, many enterprises change theirstrategies and are coupled in partnerships with suppliers,subcontractors and customers. This coupling forms supply chainscomprising several geographically distributed productionfacilities. Production planning in a supply chain is a complicatedand difficult task, as it has to be optimal both for the localmanufacturing units and for the whole supply chain network. Inthis paper two analytical models are used to solve the productionplanning problem in supply chain involving several enterprises.Generally in practice, for competitive and/or practical reasons,frequently each enterprise prefers to optimize its production planwith little care about the other members of the supply chain. Thiscase is presented through a simple model of decentralizedoptimization. The aim of this study is to analyze and compare thetwo types of optimization: centralized and decentralized. Theinitial question is: what are the profit and the optimal policy ofglobal (centralized) optimization in contrast to local(decentralized)? We characterize this gain by comparing theoptimal profits obtained in both cases.

Keywords

Global-local optimizationproduction planningcentralized-decentralized models.
Type
Research Article
Information
RAIRO - Operations Research , Volume 40 , Issue 2: ROADEF 03 , April 2006 , pp. 113 - 128
Copyright
© EDP Sciences, 2006

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