Modeling Industrial Lot Sizing Problems: A Review

In this paper we give an overview of recent developments in the field of modeling single-level dynamic lot sizing problems. The focus of this paper is on the modeling various industrial extensions and not on the solution approaches. The timeliness of such a review stems from the growing industry need to solve more realistic and comprehensive production planning problems. First, several different basic lot sizing problems are defined. Many extensions of these problems have been proposed and the research basically expands in two opposite directions. The first line of research focuses on modeling the operational aspects in more detail. The discussion is organized around five aspects: the set ups, the characteristics of the production process, the inventory, demand side and rolling horizon. The second direction is towards more tactical and strategic models in which the lot sizing problem is a core substructure, such as integrated production-distribution planning or supplier selection. Recent advances in both directions are discussed. Finally, we give some concluding remarks and point out interesting areas for future research

A computational comparison of several formulations for the multi-period incremental service facility location problem

The Multi-period Incremental Service Facility Location Problem, which was recently introduced, is a strategic problem for timing the location of facilities and the assignment of customers to facilities in a multi-period environment. Aiming at finding the strongest formulation for this problem, in this work we study three alternative formulations based on the so-called impulse variables and step variables. To this end, an extensive computational comparison is performed. As a conclusion, the hybrid impulse–step formulation provides better computational results than any of the other two formulations

On solving complex multi-period location models using simulated annealing

This paper describes a study aimed at evaluating the capabilities of simulated annealing in dealing with complex, real-world multi-period location problems raised by school network planning in Portugal. The problems were formulated as mixed-integer linear optimization models. The models allow for facility closure or size reduction besides facility opening and size expansion, with sizes possibly limited to a set of pre-defined standards. They assume facility costs to be divided into a fix component and two variable components, respectively dependent on facility size and facility attendance. Results obtained through the study indicate that simulated annealing can be a useful tool for solving these kinds of models.http://www.sciencedirect.com/science/article/B6VCT-426XWHV-H/1/42defe9695efc3f796150d9a3e24bc3

Network design decisions in supply chain planning

Structuring global supply chain networks is a complex decision-making process. The typical inputs to such a process consist of a set of customer zones to serve, a set of products to be manufactured and distributed, demand projections for the different customer zones, and information about future conditions, costs (e.g. for production and transportation) and resources (e.g. capacities, available raw materials). Given the above inputs, companies have to decide where to locate new service facilities (e.g. plants, warehouses), how to allocate procurement and production activities to the variousmanufacturing facilities, and how to manage the transportation of products through the supply chain network in order to satisfy customer demands. We propose a mathematical modelling framework capturing many practical aspects of network design problems simultaneously. For problems of reasonable size we report on computational experience with standard mathematical programming software. The discussion is extended with other decisions required by many real-life applications in strategic supply chain planning. In particular, the multi-period nature of some decisions is addressed by a more comprehensivemodel, which is solved by a specially tailored heuristic approach. The numerical results suggest that the solution procedure can identify high quality solutions within reasonable computational time

Facility location, capacity acquisition and technology selection models for manufacturing strategy planning

Ankara : The Institute of Engineering and Science, Bilkent Univ., 1993.Thesis (Ph.D.) -- Bilkent University, 1993.Includes bibliographical references leaves 129-141.The primary aim of this dissertation research is to contribute to the manufacturing strategy planning process. The firm is perceived as a value chain which can be represented by a production-distribution network. Structural decisions regarding the value chain of a firm are the means to implement the firm’s manufacturing strategy. Thus, development of analytical methods to aid the design of production-distribution sytems constitutes the essence of this study. The differentiating features of the manufacturing strategy planning process within the multinational companies are especially taken into account due to the significance of the globalization in product, factor, and capital markets. A review of the state-of-the-art in production-distribution system design reveals that although the evaluation of strategy alternatives received much attention, the existing analytical methods are lacking the capability to produce manufacturing strategy options. Further, it is shown that the facility location, capacity acquisition, and technology selection decisions have been dealt with separately in the literature. Whereas, the interdependencies among these structural decisions are pronounced within the international context, and hence global manufacturing strategy planning requires their simultaneous optimization. Thus, an analytical method is developed for the integration of the facility location and sizing decisions in producing a single commodity. Then, presence of product-dedicated technology alternatives in acquiring the required production capacity at each facility is incorporated. The analytical method is further extended to the multicommodity problem where product- flexible technology is also available as a technology alternative. Not only the arising models facilitate analysis of the trade-offs associated with the scale and scope economies in capacity/technology acquisition on the basis of alternative facility locations, but they also provide valuable insights regarding the presence of some dominance properties in manufacturing strategy design.Verter, VedatPh.D

On the Unique Features and Benefits of On-Demand Distribution Models

To close the gap between current distribution operations and today’s customer expectations, firms need to think differently about how resources are acquired, managed and allocated to fulfill customer requests. Rather than optimize planned resource capacity acquired through ownership or long- term partnerships, this work focuses on a specific supply-side innovation – on-demand distribution platforms. On-demand distribution systems move, store, and fulfill goods by matching autonomous suppliers\u27 resources (warehouse space, fulfillment capacity, truck space, delivery services) to requests on-demand. On-demand warehousing systems can provide resource elasticity by allowing capacity decisions to be made at a finer granularity (at the pallet-level) and commitment (monthly versus yearly), than construct or lease options. However, such systems are inherently more complex than traditional systems, as well as have varying costs and operational structures (e.g., higher variable costs, but little or no fixed costs). New decision- supporting models are needed to capture these trade-offs

An integrated evaluation of facility location, capacity acquisition, and technology selection for designing global manufacturing strategies

Emergence of global markets enhanced the emergence of global firms which have plants in different countries and implement an integrated management style. Due to the intensive competition in global markets, manufacturing performance is conceived as an important strategic weapon. Facility location, capacity acquisition and technology selection decisions constitute means to implement manufacturing strategies. We review the literature in order to contribute to a better understanding of global manufacturing strategies. As a result we observe that an integrated analysis of the location, capacity and technology decisions is vital for the design of effective global manufacturing strategies. © 1992

Relocatable modular capacities in risk aware strategic supply network planning under demand uncertainty

We propose a new model formulation for a three-echelon supply network design problem incorporating the concept of relocatable modular capacities. A robust supply network configuration must be determined based on uncertain demand. Furthermore, by incorporating the conditional value at risk (CVaR), the risk induced by uncertain demand is explicitly considered. The derived supply network configuration should maximize the weighted sum of the expected net present value and the CVaR. The resulting nonlinear model formulation is approximated by a piecewise linearization. Our numerical investigation shows that the derived supply network configuration is robust and stable in the presence of uncertain demand

ROLAND : a tool for the realistic optimisation of local access network design

Bibliography: p. 141-147.Investment in the local access network represents between 50% and 70% of capital investment of a telecommunications company. This thesis investigates algorithms that can be used to design economical access networks and presents ROLAND: a tool that incorporates several of these algorithms into an interactive environment. The software allows a network designer to explore different approaches to solving the problem, before adopting a particular one. The family of problems that are tackled by the algorithms included in ROLAND involve determining the most economical way of installing concentrators in an access network and connecting demand nodes such as distribution points to these concentrators. The Centre-of-Mass (COM) Algorithm identifies clusters of demand in the network and suggests good locations for concentrators to be installed. The problem of determining which concentrators in a set of potential sites to install is known as the concentrator location problem (CPL) and is an instance of the classical capacitated plant location problem. Linear programming techniques such as branch-and-bound can be used to find an optimal solution to this problem, but soon becomes infeasible as the network size increases. Some form of heuristic approach is needed, and ROLAND includes two such heuristics, namely the Add and Drop Heuristic. Determining the layout of multi-drop lines, which allow a number of demand nodes to share the same connection to a concentrator, is analogous to finding minimal spanning trees in a graph. Greedy approaches such as Kruskal's algorithm are not ideal however, and heuristics such as Esau-William's algorithm achieve better results. Kruskal's algorithm and Kershenbaum's Unified Algorithm (which encapsulates a number of heuristics) have been implemented and come bundled with ROLAND. ROLAND also includes an optimal terminal assignment algorithm for associating distribution points to concentrators. A description of ROLAND's architecture and GUI are provided. The graphical elements are kept separate from the algorithm implementations, and an interface class provides common data structures and routines for use by new algorithm implementations. A test data generator, able to create random or localized data, is also included. A new hybrid concentrator location algorithm, known as the Cluster-Add Heuristic is presented. The implementation of this algorithm is included in ROLAND, and demonstrates the ease with which new solution methods can be integrated into the tool's framework. Experimentation with the concentrator location algorithms is conducted to show the Cluster-Add Heuristic's relative performance