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

Author

Listed:
  • Bredström, David

    () (Dept. of Mathematics, Linköpings universitet)

  • Rönnqvist, Mikael

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

Abstract

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.

Suggested Citation

  • Bredström, David & Rönnqvist, Mikael, 2006. "Supply Chain Optimization in Pulp Distribution using a Rolling Horizon Solution Approach," Discussion Papers 2006/17, Norwegian School of Economics, Department of Business and Management Science.
  • Handle: RePEc:hhs:nhhfms:2006_017
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    File URL: http://hdl.handle.net/11250/163850
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    References listed on IDEAS

    as
    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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Supply chain; Ships; Scheduling; Mixed integer programming;

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices

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