Discussion Papers, Department of Finance and Management Science, Norwegian School of Economics (NHH)
No 2006/17:
Supply Chain Optimization in Pulp Distribution using a Rolling Horizon Solution Approach
David Bredström ()
and Mikael Rönnqvist ()
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.
Keywords: Supply chain; Ships; Scheduling; Mixed integer programming; (follow links to similar papers)
JEL-Codes: Q21; (follow links to similar papers)
18 pages, December 1, 2006
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