An integrated shipment planning and storage capacity decision under uncertainty: a simulation study

Purpose – In transportation and distribution systems, the shipment decisions, fleet capacity, and storage capacity are interrelated in a complex way, especially when the authors take into account uncertainty of the demand rate and shipment lead time. While shipment planning is tactical or operational in nature, increasing storage capacity often requires top management’s authority. The purpose of this paper is to present a new method to integrate both operational and strategic decision parameters, namely shipment planning and storage capacity decision under uncertainty. The ultimate goal is to provide a near optimal solution that leads to a striking balance between the total logistics costs and product availability, critical in maritime logistics of bulk shipment of commodity items. Design/methodology/approach – The authors use simulation as research method. The authors develop a simulation model to investigate the effects of various factors on costs and service levels of a distribution system. The model mimics the transportation and distribution problems of bulk cement in a major cement company in Indonesia consisting of a silo at the port of origin, two silos at two ports of destination, and a number of ships that transport the bulk cement. The authors develop a number of “what-if” scenarios by varying the storage capacity at the port of origin as well as at the ports of destinations, number of ships operated, operating hours of ports, and dispatching rules for the ships. Each scenario is evaluated in terms of costs and service level. A full factorial experiment has been conducted and analysis of variance has been used to analyze the results. Findings – The results suggest that the number of ships deployed, silo capacity, working hours of ports, and the dispatching rules of ships significantly affect both total costs and service level. Interestingly, operating fewer ships enables the company to achieve almost the same service level and gaining substantial cost savings if constraints in other part of the system are alleviated, i.e., storage capacities and working hours of ports are extended. Practical implications – Cost is a competitive factor for bulk items like cement, and thus the proposed scenarios could be implemented by the company to substantially reduce the transportation and distribution costs. Alleviating storage capacity constraint is obviously an idea that needs to be considered when optimizing shipment planning alone could not give significant improvements. Originality/value – Existing research has so far focussed on the optimization of shipment planning/scheduling, and considers shipment planning/scheduling as the objective function while treating the storage capacity as constraints. The simulation model enables “what-if” analyses to be performed and has overcome the difficulties and impracticalities of analytical methods especially when the system incorporates stochastic variables exhibited in the case example. The use of efficient frontier analysis for analyzing the simulation results is a novel idea which has been proven to be effective in screening non-dominated solutions. This has provided the authors with near optimal solutions to trade-off logistics costs and service levels (availability), with minimal experimentation times

The TIGER Model: Application of detailed passenger and freight transport in a regional CGE setting

The present paper describes the construction and first empirical application of the TIGER model (TIGER is an abbreviation of “Transport and Infrastructure General Equilibrium model for Regionsâ€). The TIGER model belongs to the group of regional CGE models, applying a mix of conventional modelling techniques used in standard computable general equilibrium models and New Economic Geography elements. The TIGER model can be used to evaluate transport policies on economic and environmental effects. Innovative features of the TIGER model are the detailed modelling of the transport sector and modelling of commuting and migration decisions. The approach of the TIGER model is to model cross-border related transport policies on a disaggregate level, with freight and passenger transport flows, allowing for different transport modes (road, water, rail), distinguishing between public and private transport, and for different transport motives. Commuting trips will be modelled in detail, by a location-attraction function, jointly determining area of residence and place of work. The TIGER model is constructed as a regional model on the NUTS-3 level for Belgium, the Netherlands, Luxemburg and a part of Germany, where regions are linked by interregional trade flows, transport trips and migration. In a similar way the model can be extended to all NUTS-3 regions in Europe. This paper will relate on the construction of the database for the model and the addition of innovative elements in the model, necessary to model transnational passenger and freight flows. The construction of the model is based on the available data in the TRANSTOOLS database. The detail offered by the TIGER model allows for a quantitative evaluation of effects of several transport policies with a transnational dimension in the Benelux and Germany. We will present results of the TIGER model based on a current project in the Benelux.

A MAS model for optimizing the spatial aspects of livestock production and manure abatement

As a consequence of the EU Nitrates Directive many countries have developed policies to regulate manure production and manure emission on land. Farmers have three allocation options: spreading manure on own land, transporting manure to other farmers’ land and processing manure. To better understand the manure problem as an allocation problem a spatial mathematical programming multi-agent model has been developed. The model is applied for Flanders (Belgium), a highly concentrated livestock area. Using this model, policy alternatives and their cost efficiency can be evaluated. These simulations result in advice on location and type of manure processing and an indicator which creates transparency in the manure and processing market

Advancing the state of the art in the modelling and simulation of information systems evaluation

It is widely accepted that Information Systems Evaluation (ISE) is a powerful and useful technique that can be used to assess IT/IS investments in an a-priori or a-posteriori sense. Traditional approaches to ISE have tended to centre upon financial and management accounting frameworks, seeking to reconcile tangible and intangible costs, benefits, risks and value factors. Such techniques, however, do not provide the IS researcher or practitioner with further insight or appreciation of any inherent and implicit inter-relationships, in the investment justification process. Thus, this paper outlines and discusses via a taxonomy and resulting classification, alternative and complementary approaches that can be applied to ISE from the fields of Artificial Intelligence (AI), Operational Research (OR) and Management Science (MS). The paper subsequently concludes that such approaches can be potentially used by researchers and practitioners in the field, as a basis for carrying out further research in the field of applied ISE

National economic policy simulations with global interdependencies : a sensitivity analysis for Germany

"Policy simulations for national economies with econometric models in general are done using a stand alone national model with exogenous export values and import prices. In a globalised world such an exercise is critical, since the policy in question may change the export prices and the import volumes of the particular country and induce via international trade a change of the economic activities of the global economy and a feed back to the export values and import prices of the particular country. The paper at hand presents a sensitivity analysis for Germany comparing the impacts of a shock on investment in a stand alone simulation using the multisector model INFORGE with the results, which occur, if the same model is linked to the global multicountry/multisector model GINFORS endogenising Germany's export values and import prices. The results are striking: The effect on real GDP is 50% higher in the global simulation than in the stand alone case. Because of the specialisation in trade the differences on the sector level are even stronger." (Author's abstract, IAB-Doku) ((en))Wirtschaftspolitik, Globalisierung - Auswirkungen, Export, Preisniveau, Importquote, Exportquote, Welthandel, Ökonometrie - Modell, Bruttoinlandsprodukt, volkswirtschaftliche Gesamtrechnung, Außenhandelspolitik, Außenhandelsentwicklung

Land-Use Transport Interaction: State of the Art

This paper investigates innovative approaches to the integration of land-use and transport planning in urban regions. Engineering, economic and social-science based theories and empirical studies are analyzed regarding their ability to explain the interaction between land use and transport - that land use determines traffic flows and that transport infrastructure changes land-use patterns. In addition, this paper provides an overview of the state of the art of computer models for the simulation of land use and transport. Based on these theories and models the effectiveness of policies to influence land use and transport in urban regions is assessed.Urban location theory, transportation research, land use- transport interaction, urban simulation modeling, location choice