A general model for production-transportation planning in steel supply chain

Document Type : Research Paper


Industrial Engineering Department, Faculty of Engineering, Shahed University, Tehran, Iran


This paper is focused on the tactical design of steel supply chain (SSC). A general mathematical model is proposed to integrate production and transportation planning in multi-commodity SSC. The main purpose is to prepare a countrywide production and distribution plan in an SSC with three layers consisting of iron ore mines as suppliers, steel companies as producers, and subsidiary steel companies as customers. An internal supply chain consisting of melting furnaces and casting lines in each producer is also taken into account. Demand is assumed to be deterministic and known at the beginning of planning horizon. Each mine supplies iron ore with specific chemical compounds (CCs) and each producer needs a given volume of iron ore with a pre-determined range of CCs which can be provided by mixing several kinds of iron ores. Finally, a real test case in SSC is described and solved using the proposed model. Sensitivity analysis supports the decision makers with noteworthy information about tactical decisions.


[1] E.H. Sabri and B.M. Beamon: Omega, 28(2000), 581.
[2] S. Chopra and P. Meindl: Supply chain management: strategy, planning, and operation, (3rd edition), New Jersey: Prentice Hall, (2007), 42.
[3] M.T. Melo, S. Nickel and F. Saldanha da Gama: Eur. J. Oper. Res., 196(2009), 401.
[4] A. Atighechian, M. Bijari and H. Tarkesh: Comput. Oper. Res., 36(2009), 2450.
[5] S. Zanoni and L. Zavanella: Int. J. Prod.Econ., 93(2005), 197.
[6] B. Bilgen and I. Ozkarahan: Int. J. Prod.Econ., 107(2007), 555.
[7] L. Chiun-Ming and Hanif D. Sherali, C.M.Liu and H.D. Sherali, Omega, 28(2000), 433.
[8] M.L. Fisher: What is the right supply chain for your product, Harvard Business Review, March-April, (1997).