This paper studied the problem of integrated production and lo-
gistics planning under the commit-to-deliver policy. This problem
arises in many supply chains and is particularly relevant to the con-
tract manufacturing industry, which deals with a group of customers
and relies on third party services for delivering the orders. We have
provided a framework (model and solution approaches) for a de-
cision support tool that can assist manufacturers to better coordi-
nate their production scheduling and shipping planning for improved
overall performance. We studied a manufacturing setting with mul-
tiple unrelated parallel processors where orders have release dates,
sequence dependent setup times and delivery due dates with non-
linear tardiness penalties. On the logistics side, we considered third
party air and surface transportation options that provide a variety of
pre-scheduled shipping options with different lead times and costs.
While problem of integrating production and distribution has been
studied before and its advantages were demonstrated in practice, this
is the first research that considers the manufacturing scheduling in
detail to allow for more realistic settings.