In this paper, we studied a new integrated production scheduling, vehicle routing, inventory and outsourcing problem. The production phase considers parallel machine scheduling including setup times with outsourcing allowed and the distribution phase considered batch delivery by a fleet of homogenous vehicles with respect to holding cost of completed jobs. The objective of the Mixed Integer Linear Programming (MILP) formulated model is to minimize the total costs including production, outsourcing, holding, tardiness and distribution fixed and variable costs. Due to the nondeterministic polynomial time (Np)-hardness of the problem, we derive a number of dominance properties for the optimal solution and combine them with a Genetic Algorithm (GA) to solve the problem. To assess the efficiency and effectiveness of the proposed hybrid algorithm, we conduct the computational study on randomly generated instances. Sensitivity analyses showed the impacts of the parameters on the objective function were incorporated. In order to evaluate the significance of the differences among the results obtained by GA and GADP one-tailed paired t tests were performed and interval plots were depicted.
