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Supply Chain Optimization in Pulp Distribution using a Rolling Horizon Solution Approach

Listed author(s):
  • Bredström, David


    (Dept. of Mathematics, Linköpings universitet)

  • Rönnqvist, Mikael


    (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)

Registered author(s):

    In this paper we consider a combined supply chain and ship routing problem for a large pulp producer in Scandinavia. The problem concerns the distribution of pulp to customers, with route scheduling of ships as a central part of modeling. It is an operative planning problem with daily ship routing decisions over a 40 days period. The pulp supply is determined by fixed production plans, and the transport flows and storages are modeled with the requirement to satisfy the demand in a cost-optimal way. We develop a mixed integer programming model with binary variables for route usage of a vessel. The problem is solved with a heuristic solution method, based on a rolling time horizon and a standard branch and bound algorithm. We apply the heuristic on problem instances with real world data, and compare results from reduced problem instances with the results from an exact branch and bound search. The computational experiments indicate that real world problems are solvable with the solution method and that it in many cases can be very efficient.

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    Paper provided by Department of Business and Management Science, Norwegian School of Economics in its series Discussion Papers with number 2006/17.

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    Length: 18 pages
    Date of creation: 01 Dec 2006
    Handle: RePEc:hhs:nhhfms:2006_017
    Contact details of provider: Postal:
    NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway

    Phone: +47 55 95 92 93
    Fax: +47 55 95 96 50
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    1. Fagerholt, Kjetil, 2001. "Ship scheduling with soft time windows: An optimisation based approach," European Journal of Operational Research, Elsevier, vol. 131(3), pages 559-571, June.
    2. Merce, C. & Fontan, G., 2003. "MIP-based heuristics for capacitated lotsizing problems," International Journal of Production Economics, Elsevier, vol. 85(1), pages 97-111, July.
    3. Drexl, A. & Kimms, A., 1997. "Lot sizing and scheduling -- Survey and extensions," European Journal of Operational Research, Elsevier, vol. 99(2), pages 221-235, June.
    4. Karimi, B. & Fatemi Ghomi, S. M. T. & Wilson, J. M., 2003. "The capacitated lot sizing problem: a review of models and algorithms," Omega, Elsevier, vol. 31(5), pages 365-378, October.
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