Multi-objective optimization for the integrated supply and production planning in olive oil industry

Sustainable agriculture, among other things, implies encouraging a diverse and decentralized system of family farms rather than corporate concentration. The challenge is to find a way to organize coalitions improving the food system. The case study that inspired this work originates from Istria, a Croatian region with 25 olive oil producers and about 5,000 mostly small farmers growing and harvesting olives. To account for all the objectives of the agri-food supply chain participants, this work aims to set up a model for its integrated optimization, give its mathematical formulation and suggest a method for solving the problem

Multi-objective optimization for the integrated supply and production planning in olive oil industry

Sustainable agriculture, among other things, implies encouraging a diverse and decentralized system of family farms rather than corporate concentration. The challenge is to find a way to organize coalitions improving the food system. The case study that inspired this work originates from Istria, a Croatian region with 25 olive oil producers and about 5,000 mostly small farmers growing and harvesting olives. To account for all the objectives of the agri-food supply chain participants, this work aims to set up a model for its integrated optimization, give its mathematical formulation and suggest a method for solving the problem

METAHEURISTICS FOR OPTIMIZING SAFETY STOCK IN MULTI STAGE INVENTORY SYSTEM

Managing the right level of inventory is critical in order to achieve the targeted level of customer service, but it also carries significant cost in supply chain. In majority of cases companies define safety stock on the most downstream level, i.e. the finished product level, using different analytical methods. Safety stock on upstream level, however, usually covers only those problems which companies face on that particular level (uncertainty of delivery, issues in production, etc.). This paper looks into optimizing safety stock in a pharmaceutical supply considering the three stages inventory system. The problem is defined as a single criterion mixed integer programming problem. The objective is to minimize the inventory cost while the service level is predetermined. In order to coordinate inventories at all echelons, the variable representing the so-called service time is introduced. Because of the problem dimensions, metaheuristics based on genetic algorithm and simulated annealing are constructed and compared, using real data from a Croatian pharmaceutical company. The computational results are presented evidencing improvements in minimizing inventory costs

Price changing and inventory sharing in supply chain management

The main task of supply chain management is to balance efficiency and effectiveness. Numerous operational management strategies are used to make a supply chain efficient, one such is inventory management. In this paper, we will consider a particular part of a supply chain consisting comprising a manufacturer and a retailer with the goal of minimizing associated inventory costs. We will focus on an inventory of final products determined as the difference between supply and demand and are expressed as a function of price, inflation rate and change in inflation rate resulting in the possible speculations. The manufacturer’s inventory cost is a function of these same variables, with the retailer’s inventory cost having the same function in addition to the margin. The problem is formulated as a dynamic game to share the speculation problem. The optimization problems to be solved are optimal control theory problems with objective functions in the form of integral functional with the integrand depending on the state function and its first and second derivative

A Mathematical Model and Programme Support for Determination of the Values of the Marginal Reserve Requirement as Instrument of Monetary Policy

This paper studies the problem of interdependence between central bank and commercial bank goals. The basic central bank task is to achieve and to maintain price stability. Croatian external debt has been increasing for years and so the activities of the Croatian National Bank are designed to correct this situation. In order to stop the further increase of the external debt, the Croatian National Bank uses several monetary policy instruments, among which is the marginal reserve requirement. On the other hand, the goal of commercial banks is to maximise profits. Banks take loans from abroad at a lower interest rate and invest this money in Croatia at a higher interest rate, thus fulfilling their goal. In order to obtain the desired effects of the marginal reserve requirement, its optimal percentage value should be determined. This problem is modelled as a bi-level mixed 0-1 programming problem. The objective of the leader (Croatian National Bank) is to minimize the increase in household loans by setting different percentages of the reserve requirements for loans extended to households and for those granted to enterprises. The objective of the followers (banks) is to maximize profits. In order to solve this NP-hard problem a heuristic is proposed. In order to verify the model, the paper ends with simulations and the presentation of computational results

METAHEURISTICS FOR OPTIMIZING SAFETY STOCK IN MULTI STAGE INVENTORY SYSTEM

Managing the right level of inventory is critical in order to achieve the targeted level of customer service, but it also carries significant cost in supply chain. In majority of cases companies define safety stock on the most downstream level, i.e. the finished product level, using different analytical methods. Safety stock on upstream level, however, usually covers only those problems which companies face on that particular level (uncertainty of delivery, issues in production, etc.). This paper looks into optimizing safety stock in a pharmaceutical supply considering the three stages inventory system. The problem is defined as a single criterion mixed integer programming problem. The objective is to minimize the inventory cost while the service level is predetermined. In order to coordinate inventories at all echelons, the variable representing the so-called service time is introduced. Because of the problem dimensions, metaheuristics based on genetic algorithm and simulated annealing are constructed and compared, using real data from a Croatian pharmaceutical company. The computational results are presented evidencing improvements in minimizing inventory costs

SINGLE CRITERION SUPPLY CHAIN MANAGEMENT IN OLIVE OIL INDUSTRY

In this work we consider the supply chain management in olive oil industry. We construct the mixed-integer programming model connecting the optimization of olives harvesting and storage and olive oil production. The goal is to maximize the olive oil producer profit consisting of revenue, production cost and storage cost. In the same time, we have to take into the consideration the farmers’ (suppliers’) utility too. Namely, the suppliers want to maintain the harvest delay and delivery cost as minimal as possible. In the case of single criterion optimization problem we suppose that the producer is taking care of all five goals, so the objective function consists of the producer’s revenue, storage cost, production cost, harvest delay and delivery cost with the appropriate sign. Due to the big dimension of the problem two heuristics are proposed for solving it. Some simulations are performed and the results show good heuristics behavior

Matematički model i programska podrška za određivanje vrijednosti granične obvezne pričuve kao instrumenta monetarne politike

U radu se promatra problem međuovisnosti ciljeva središnje banke i poslovnih banaka. Osnovni je cilj Hrvatske narodne banke postizanje i održavanje stabilnosti cijena. Zbog višegodišnjeg problema visokog udjela inozemnog duga u BDP-u, aktivnosti središnje banke uvelike su usmjerene na destimuliranje rasta zaduživanja poslovnih banaka u inozemstvu. Radi sprječavanja daljnjeg rasta inozemnog duga poslovnih banaka, HNB se koristi s nekoliko instrumenata monetarne politike, među kojima se posebno izdvaja granična obvezna pričuva. Nasuprot tome, cilj poslovnih banaka je ostvarenje što veće dobiti. Pritom se one zadužuju u inozemstvu po nižoj, a sredstva plasiraju u obliku kredita na domaćem tržištu po višoj kamatnoj stopi i tako ostvaruju svoj cilj. Da bi granična obvezna pričuva imala željene učinke, potrebno je odrediti optimalni postotak izdvajanja. Za to je razvijen matematički model dvorazinskoga mješovitog 0-1 programiranja. Cilj voditelja (u ovom primjeru HNB-a) jest određivanjem različitih postotaka pričuve minimizirati porast kreditnih plasmana stanovništvu od poslovnih banaka, a cilj sljedbenika (poslovnih banaka) jest maksimizacija dobiti. S matematičke je strane to NP-težak problem i stoga se za njegovo rješavanje primjenjuje heuristika. Na kraju su provedene simulacije radi verifikacije modela i izloženi rezultati numeričkih izračuna

Some Precedence Relations in Single Machine Sequencing

A model for real-time control of flexible manufacturing systems is considered. In this model, a machine can process a finite number of part types at specified rates, but only one part type can be processed at any given time. Each switch from one type to another requires different setup times.A better upper bound on the total work backlog than those available in literature is derived by introducing the clear-the-largest-work-after- setup (CLWS) heuristic policy which stabilizes the system in the sense that, in the long run, the required demand is met.Studying whether the CLWS scheduling policy induces convergence to a stationary state, some precedence relations between part types are reported with the computational results