A Multi Objective Mathematical Model for Two-Echelon Production-Inventory-Routing Problem of Pharmaceutical Products

The drug supply chain is a part of the health care system, which is of great importance in increasing the health of the community and therefore it is a critical issue in any country. In this paper, we have tried to deal with one of the most important challenges of the current pharmaceutical industry, namely the lack of coordination between different sectors of the chain, by presenting a mathematical model for integrated production-inventory-routing problem. The problem has two objective functions; the first objective function minimizes the total cost of the system, including fixed and variable costs of production, transportation, inventory and spoilage cost, and the second objective function minimizes environmental impacts caused by the production and transportation of drugs. In addition, in this paper, the production mode by several different manufacturers and two-stage distribution is considered. After presenting the mathematical model of the above problem, in order to cope with demand uncertainty, a scenario-based stochastic programming is used for modeling. The model will be implemented at BayerPool Pharmaceutical Company and the results will be analyzed. The results showed that increasing demand led to increases in both objective functions of the problem. At the end, sensitivity analysis is also done on two parameters of the problem. Increasing setup costs of production increases the total cost objective function and reduces the greenhouse gas emissions objective function.