Optimisation model for multi-item multi-echelon supply chains with nested multi-level products

This study proposes a mathematical optimisation model for the horizontal integration of the basic processes of production, inventory, and transportation planning on a tactical level. The model enables planning for cutting, assembly, transportation, and inventory while considering process times. Several items (raw materials, intermediate goods, finished products, and transport vehicles) are routed through a network. The general structure is defined by the layout of the supply network and the configurable multi-level bills of materials of products and transportation equipment, which can be converging, diverging, or mixed. To stress the practical applications of this study, we demonstrate how this generic model can be used and customised to solve an actual planning task in a multi-stage automotive production network using real industry data.