In this study we develop a capacity expansion model of an integrated produc
tion and distribution system comprised of multisite batch plants and severa
l warehouses. Such an integration of the production and distribution system
can generate significant savings by trading off the costs associated with
the whole, rather than minimizing production and distribution costs separat
ely. The study presented here to be considered as two or more multiproduct
batch plants producing several products to supply several warehouses. An ob
jective function is defined as a net profit in a chemical company - total e
xpected selling price minus the cost of new units and the expected shipping
cost. We determine a revised plant configuration. sizes and operating mode
s of newly added units, new shipments from plant to warehouse and batch pro
cessing variables. The effectiveness of its application is illustrated with
two case studies. The case studies are solved with GAMS/DICOPT + +. (C) 20
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