Real-time optimization of an integrated production-inventory-distribution problem.

In today\u27s competitive business environment, companies face enormous pressure and must continuously search for ways to design new products, manufacture and distribute them in an efficient and effective fashion. After years of focusing on reduction in production and operation costs, companies are beginning to look into distribution activities as the last frontier for cost reduction. In addition, an increasing number of companies, large and small, are focusing their efforts on their core competencies which are critical to survive. This results in a widespread practice in industry that companies outsource one or more than one logistics functions to third party logistics providers. By using such logistics expertise, they can obtain a competitive advantage both in cost and time efficiency, because the third party logistics companies already have the equipment, system and experience and are ready to help to their best efforts. In this dissertation, we developed an integrated optimization model of production, inventory and distribution with the goal to coordinate important and interrelated decisions related to production schedules, inventory policy and truckload allocation. Because outsourcing logistics functions to third party logistics providers is becoming critical for a company to remain competitive in the market place; we also included an important decision of selecting carriers with finite truckload and drivers for both inbound and outbound shipments in the model. The integrated model is solved by modified Benders decomposition which solves the master problem by a genetic algorithm. Computational results on test problems of various sizes are provided to show the effectiveness of the proposed solution methodology. We also apply this proposed algorithm on a real distribution problem faced by a large national manufacturer and distributor. It shows that such a complex distribution network with 22 plants, 7 distribution centers, 8 customer zones, 9 products, 16 inbound and 16 outbound shipment carriers in a 12-month planning period can be redesigned within 33 hours. In recent years, multi-agent simulation has been a preferred approach to solve logistics and distribution problems, since these problems are autonomous, distributive, complex, heterogeneous and decentralized in nature and they require extensive intelligent decision making. Another important part in this dissertation involved a development of an agent-based simulation model to cooperate with the optimal solution given by the optimization model. More specifically, the solution given by the optimization model can be inputted as the initial condition of the agent-based simulation model. The agent-based simulation model can incorporate many other factors to be considered in the real world, but optimization cannot handle these as needed. The agent-based simulation model can also incorporate some dynamics we may encounter in the real operations, and it can react to these dynamics in real time. Various types of entities in the entire distribution system can be modeled as intelligent agents, such as suppliers, carriers and customers. In order to build the simulation model more realistic, a sealed bid multiunit auction with an introduction of three parameters a, ß and y is well designed. With the help of these three parameters, each agent makes a better decision in a simple and fast manner, which is the key to realizing real-time decision making. After building such a multi-agent system with agent-based simulation approach, it supports more flexible and comprehensive modeling capabilities which are difficult to realize in a general optimization model. The simulation model is tested and validated on an industrial-sized problem. Numerical results of the agent-based simulation model suggest that with appropriate setting of three parameters the model can precisely represent the preference and interest of different decision makers

An integrated planning model for multi-supplier, multi-facility, multi-customer, multi-product and multi-period : application to the wood furniture industry

Typiquement, un réseau de création de valeur dans l'industrie du meuble en bois, est composé de fournisseurs de billes de bois, de scieries, de séchoirs, d'usines de meubles, de centres de distribution et de détaillants. Dans cette thèse, nous nous concentrons sur l'étude du réseau qui assure l'approvisionnement des usines de meubles en bois. La problématique à laquelle font face les entreprises de ce réseau se situe principalement au niveau de la synchronisation des flux de matière. Ces derniers doivent respecter les contraintes de capacité, de procédés, de transport et la diversité des produits, pour satisfaire la demande. La planification, dans ce contexte, repose sur une vision locale ce qui affecte la performance globale du réseau. L'objectif de cette thèse est de proposer un modèle de planification intégrée dans un contexte, multifoumisseurs, multiusines, multiproduits, multiclients et multipériodes, qui vise la synchronisation des flux, et la maximisation de la performance globale tout en respectant les différentes contraintes du réseau. Nous proposons un modèle générique du problème de planification intégrée qui permet de déterminer les décisions tactiques d'approvisionnement, d'inventaire, de flux de matière et de sous-traitance. Ce modèle est un programme linéaire mixte en nombres entiers de grande taille. Nous avons développé une heuristique basée sur la décomposition dans le temps qui exploite l'aspect multipériodes du problème de planification. Nous avons aussi proposé deux solutions basées sur la décomposition de Benders et la décomposition croisée pour réduire le temps de résolution. Enfin, ce modèle a été validé en utilisant les données réelles de l'entreprise partenaire du projet et les résultats, montrent des réductions potentielles du coût total des opérations de l'ordre de 22%. L'approche de planification intégrée adoptée ainsi que les méthodes de résolution proposées dans cette thèse peuvent être exploitées pour la planification des réseaux dans d'autres secteurs d'activités ayant des similarités avec la problématique traitée dans cette thèse

Modeling and solving the multi-period inventory routing problem with constant demand rates

The inventory routing problem (IRP) is one of the challenging optimization problems in supply chain logistics. It combines inventory control and vehicle routing optimization. The main purpose of the IRP is to determine optimal delivery times and quantities to be delivered to customers, as well as optimal vehicle routes to distribute these quantities. The IRP is an underlying logistical optimization problem for supply chains implementing vendor-managed inventory (VMI) policies, in which the supplier takes responsibility for the management of the customers' inventory. In this paper, we consider a multi-period inventory routing problem assuming constant demand rates (MP-CIRP). The proposed model is formulated as a linear mixed-integer program and solved with a Lagrangian relaxation method. The solution obtained by the Lagrangian relaxation method is then used to generate a close to optimal feasible solution of the MP-CIRP by solving a series of assignment problems. The numerical experiments carried out so far show that the proposed Lagrangian relaxation approach nds quite good solutions for the MP-CIRP and in reasonable computation times

A MATHEMATICAL FRAMEWORK FOR OPTIMIZING DISASTER RELIEF LOGISTICS

In today's society that disasters seem to be striking all corners of the globe, the importance of emergency management is undeniable. Much human loss and unnecessary destruction of infrastructure can be avoided with better planning and foresight. When a disaster strikes, various aid organizations often face significant problems of transporting large amounts of many different commodities including food, clothing, medicine, medical supplies, machinery, and personnel from several points of origin to a number of destinations in the disaster areas. The transportation of supplies and relief personnel must be done quickly and efficiently to maximize the survival rate of the affected population. The goal of this research is to develop a comprehensive model that describes the integrated logistics operations in response to natural disasters at the operational level. The proposed mathematical model integrates three main components. First, it controls the flow of several relief commodities from sources through the supply chain until they are delivered to the hands of recipients. Second, it considers a large-scale unconventional vehicle routing problem with mixed pickup and delivery schedules for multiple transportation modes. And third, following FEMA's complex logistics structure, a special facility location problem is considered that involves four layers of temporary facilities at the federal and state levels. Such integrated model provides the opportunity for a centralized operation plan that can effectively eliminate delays and assign the limited resources in a way that is optimal for the entire system. The proposed model is a large-scale mixed integer program. To solve the model, two sets of heuristic algorithms are proposed. For solving the multi-echelon facility location problem, four heuristic approaches are proposed. Also four heuristic algorithms are proposed to solve the general integer vehicle routing problem. Overall, the proposed heuristics could efficiently find optimal or near optimal solution in minutes of CPU time where solving the same problems with a commercial solver needed hours of computation time. Numerical case studies and extensive sensitivity analysis are conducted to evaluate the properties of the model and solution algorithms. The numerical analysis indicated the capabilities of the model to handle large-scale relief operations with adequate details. Solution algorithms were tested for several random generated cases and showed robustness in solution quality as well as computation time

Bulk wheat transportation and storage problem of public distribution system

This research investigates the multi-period multi-modal bulk wheat transportation and storage problem in a two-stage supply chain network of Public Distribution System (PDS). The bulk transportation and storage can significantly curtail the transit and storage losses of food grains, which leads to substantial cost savings. A mixed integer non-linear programming model (MINLP) is developed after studying the Indian wheat supply chain scenario, where the objective is to minimize the transportation, storage and operational cost of the food grain incurred for efficient transfer of wheat from producing states to consuming states. The cost minimization of Indian food grain supply chain is a very complex and challenging problem because of the involvement of the many entities and their constraints such as seasonal procurement, limited scientific storages, varying demand, mode of transportation and vehicle capacity constraints. To address this complex and challenging problem of food grain supply chain, we have proposed the novel variant of Chemical Reaction Optimization (CRO) algorithm which combines the features of CRO and Tabu search (TS) and named it as a hybrid CROTS algorithm (Chemical reaction optimization combined with Tabu Search). The numerous problems with different sizes are solved using the proposed algorithm and obtained results have been compared with CRO. The comparative study reveals that the proposed CROTS algorithm offers a better solution in less computational time than CRO algorithm and the dominance of CROTS algorithm over the CRO algorithm is demonstrated through statistical analysis

Integrated production-distribution systems : Trends and perspectives

During the last two decades, integrated production-distribution problems have attracted a great deal of attention in the operations research literature. Within a short period, a large number of papers have been published and the field has expanded dramatically. The purpose of this paper is to provide a comprehensive review of the existing literature by classifying the existing models into several different categories based on multiple characteristics. The paper also discusses some trends and list promising avenues for future research

Cargo Consolidation and Distribution Through a Terminals-Network: A Branch-And-Price Approach

Less-than-truckload is a transport modality that includes many practical variations to convey a number of transportation-requests from the origin locations to their destinations by using the possibility of goods-transshipments on the carrier?s terminals-network. In this way logistics companies are required to consolidate shipments from different suppliers in the outbound vehicles at a terminal of the network. We present a methodology for finding near-optimal solutions to a less-than-truckload shipping modality used for cargo consolidation and distribution through a terminals-network. The methodology uses column generation combined with an incomplete branch-and-price procedure.Fil: 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