Optimizing the inventorying and distribution of chemical fluids: An innovative nested column generation approach

Vendor-managed-inventory is a successful business practices based on the cooperation between a supplier and its customers in which demand and inventory information from the customers are shared with the supplier. This practice is gaining popularity in the chemical industry and relies on the inventory-routing-problem, which integrates inventory management, vehicle routing, and delivery scheduling decisions. This one is a difficult combinatorial optimization problem both theoretically and practically. However, because of the large expenses involved in distribution and inventorying of chemical products, it is attractive to make use of optimization tools for exploiting as many degrees of freedom as possible with the goal of minimizing both distribution and inventorying costs. Consequently, we propose a nested column generation algorithm for solving an inventorying and distribution problem that models the delivery of several chemicals fluids. The approach is building on a column generation & incomplete branch-and-price algorithm in which for each delivery route, the delivery patterns of fluids are also determined by column generation. We detail the implementation and provide computational results for realistic test instances.Fil: Coccola, Mariana Evangelina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Santa Fe. Instituto de Desarrollo Tecnológico para la Industria Química. Universidad Nacional del Litoral. Instituto de Desarrollo Tecnológico para la Industria Química; ArgentinaFil: Mendez, Carlos Alberto. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Santa Fe. Instituto de Desarrollo Tecnológico para la Industria Química. Universidad Nacional del Litoral. Instituto de Desarrollo Tecnológico para la Industria Química; ArgentinaFil: Dondo, Rodolfo Gabriel. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Santa Fe. Instituto de Desarrollo Tecnológico para la Industria Química. Universidad Nacional del Litoral. Instituto de Desarrollo Tecnológico para la Industria Química; Argentin

A decomposition framework for managing inventory and distribution of fluid products by an order-based-resupply methodology

Fluid chemicals are usually distributed according two main methodologies; the vendor managed inventory modality and the order-based re-supply modality. In this paper, the problem of optimizing the delivery of fluids by tanker trucks on a daily basis according the order-basedresupply methodology is addressed. According to this modality, replenishment orders are triggered by customers specifying the quantity of fluids and time-windows within which the delivery must be fulfilled. The objective is to minimize the replenishment cost while meeting customers orders over the pre-defined time-horizon. An Integer Program modelling the problem is proposed and used to develop an incomplete branch & price procedure with the purpose of finding near optimal solutions to instances arising from realistic examples. A computational study on realistic examples with different topologies demonstrates that the method is effective and able to provide solutions with integrality gaps below the 16% threshold for instances with 120 orders.Fil: Coccola, Mariana Evangelina. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Santa Fe. Instituto de Desarrollo Tecnológico para la Industria Química. Universidad Nacional del Litoral. Instituto de Desarrollo Tecnológico para la Industria Química; Argentina. Universidad Nacional del Litoral; ArgentinaFil: Mendez, Carlos Alberto. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Santa Fe. Instituto de Desarrollo Tecnológico para la Industria Química. Universidad Nacional del Litoral. Instituto de Desarrollo Tecnológico para la Industria Química; Argentina. Universidad Nacional del Litoral; ArgentinaFil: Dondo, Rodolfo Gabriel. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Santa Fe. Instituto de Desarrollo Tecnológico para la Industria Química. Universidad Nacional del Litoral. Instituto de Desarrollo Tecnológico para la Industria Química; Argentina. Universidad Nacional del Litoral; Argentin