Presentation Transcript

1. Inventory routing problems- Combined inventory management and routing

   Henrik Andersson Arild Hoff Marielle Christiansen Geir Hasle Arne Løkketangen
2. Outline Background Industrial aspects Literature review and classification Industrial aspects in the literature Trends and future directions DOMinant workshop - Molde - September 20-22 2009
3. Background DOMinant is a collaboration between Molde University College, Norwegian University of Science and Technology and SINTEF Discrete optimization models in maritime and road-based transportation Fleet size and mix vehicle routing problem Inventory routing problem First task : Get familiar with the research and write a survey on each problem DOMinant workshop - Molde - September 20-22 2009
4. Surveys Focused surveys with a broader purpose Overview of the diverse landscape of combined inventory management and routing Relation and interconnection between science and practice Practitioners can see the benefit of using advanced decision support systems in complex situations Inspire researchers to dig deeper into the field and find new and exciting challenges Discuss both land-based and maritime applications Mainly based on the research literature Own experience No field study or industry involved in the writing process DOMinant workshop - Molde - September 20-22 2009
5. Combining operations I Combining operations within the supply chain Increased efficiency Economical benefits Flexibility in services Improved robustness Which operations to integrate? Who should plan the integrated operations? For which products is it interesting to integrate operations? When should operations be integrated? DOMinant workshop - Molde - September 20-22 2009
6. Combining operations II Supply Demand Which operations to integrate? Inventory ≈ A buffer between processes to even out variations and handle uncertainty Managing the conflicting goal between supply and demand Procurement – Inventory – Production (intra) Production – Inventory – Sales (intra) Inventory – Transportation – Inventory (intra and inter) DOMinant workshop - Molde - September 20-22 2009
7. Combining operations II Supply Inventory Demand Which operations to integrate? Inventory ≈ A buffer between processes to even out variations and handle uncertainty Managing the conflicting goal between supply and demand Procurement – Inventory – Production (intra) Production – Inventory – Sales (intra) Inventory – Transportation – Inventory (intra and inter) DOMinant workshop - Molde - September 20-22 2009
8. Motivation Supplier Customer Producer Customer Producer Supplier Customer Producer Customer DOMinant workshop - Molde - September 20-22 2009
9. Motivation Control Execute Supplier Customer Producer Customer Producer Supplier Customer Producer Customer DOMinant workshop - Molde - September 20-22 2009
10. Motivation ControlExecute Supplier Customer Producer Customer Producer Supplier Customer Producer Customer Economical benefits Flexibility in services Improved robustness DOMinant workshop - Molde - September 20-22 2009
11. Combining operations III Who should plan the integrated operation? The producer A transport provider A third actor DOMinant workshop - Molde - September 20-22 2009
12. Combining operations IV For which products is it interesting to integrate operations? High value products Perishable products High impact products DOMinant workshop - Molde - September 20-22 2009
13. Combining operations V When should operations be integrated? Autonomous actors in the chain Economically beneficial at the system level Possible to split the benefits in an agreeable way Long-term relationship Willingness to share information and data DOMinant workshop - Molde - September 20-22 2009
14. Current industrial practice Inventory management and routing are treated as separate operations manual planning is still used at many companies There are very few, if any, commercial optimization-based systems in current use Several integrated systems are under development for companies in the maritime sector The liquefied natural gas industry mainly due to an extraordinary strong growth in this high value business DOMinant workshop - Molde - September 20-22 2009
15. Research perspective Looking at the coordination of inventory management and routing, it is clear that the combined problem is a long-term, dynamic problem that is inherently stochastic Since long-term, dynamic and stochastic problems are extremely difficult to solve, the approaches found in the literature have simplified the problem in one way or another DOMinant workshop - Molde - September 20-22 2009
16. Classification DOMinant workshop - Molde - September 20-22 2009
17. Finite More than one visit at a customer may be needed Common characteristics Deterministic demands Fixed inventory restrictions Road-based, maritime and generic Many-to-many topology without depot Few deliveries Heterogeneous fleet DOMinant workshop - Molde - September 20-22 2009
18. Finite II Very few exact approaches Christiansen and Nygreen, 2005 Robust plans, penalize closeness to inventory limits Path-based formulation Branch-and-price Archetti et al., 2007 Order-up-to-level policy, one vehicle Arc-flow formulation Branch-and-cut DOMinant workshop - Molde - September 20-22 2009
19. Finite III MP-based and neighborhood-based heuristics Arc-flow Miller, 1987 ; Al-Khayyal and Hwang, 2007 ; Savelsberg and Song, 2008 ; Yugang, 2008 Path-flow Bell et al., 1983 ; Persson and Göthe-Lundgren, 2005 Neigborhood-based Rusdiansyah and Tsao, 2005 (Tabu search) ; Abdelmaguid and Dessouky, 2006 (GA) ; Alegre et al., 2007 (Scatter search) ; Dauzère-Pérès, 2007 (Memetic) ; Savelsbergh and Song, 2007 (GRASP) ; Hemmelmayr et al., 2008 (VNS) DOMinant workshop - Molde - September 20-22 2009
20. Finite IV Heuristics : Main approaches Allocate first – route second Carter et al., 1996 ; Campbell and Savelsbergh, 2004 Periodic and delivery patterns Gaur and Fisher, 2004 ; Rusdiansyah and Tsao, 2005 ; Alegre et al., 2007 Imposing different inventory policies Kim and Kim, 2000 ; Bertazzi et al., 2002 DOMinant workshop - Molde - September 20-22 2009
21. Industrial aspects I Products having a relatively high consumption rate. Gas, Bell et al., 1983, Golden et al., 1984, Campbell and Savelsbergh, 2004 ; chemicals, Miller, 1987 ; automobile components,Blumenfeld et al., 1987, Alegre et al., 2007 ; ammonia, Christiansen, 1999 ; groceries, Gaur and Fisher, 2004 ; bitumen, Persson and Göthe-Lundgren, 2005 ; frozen products, Custódio and Oliveira, 2006 ; calcium carbonate slurry, Dauzère-Pérès et al., 2007 ; petrochemical products, Al-Khayyal and Hwang 2007 ; blood, Hemmelmayr et al., 2008 DOMinant workshop - Molde - September 20-22 2009
22. Industrial aspects II The uniqueness of the industrial cases is important Factors not included in already existing models Can either complicate or sometimes simplify the problem Knowledge about the number of customers that are normally visited on a route to simplify the generation of routes Using the consumption/production rates and inventory bounds to explicitly model each possible port call and to derive time windows for each visit Characteristics from the current manual planning DOMinant workshop - Molde - September 20-22 2009
23. Industrial aspects Most research where industrial problems are focused holds elements of heuristics Exact methods terminated prematurely Neighborhood-based heuristics and metaheuristics The diversity of methods used shows many paths for designing algorithms for industrial cases Knowledge about the case, and the delicate use of this knowledge when formulating and solving the problem shines through in most applications DOMinant workshop - Molde - September 20-22 2009
24. Status summary Gain in interest due to increased focus on supply chain management Many different problems, no clear definition A gap between research and academia Little work on exact methods DOMinant workshop - Molde - September 20-22 2009
25. Trends in industry Data availability, visibility and information sharing Increased cooperation along the supply chain Increased globalization Acquisitions and mergers Extended transport contracts, 3PL, 4PL A number of DSSs under development Environmental focus DOMinant workshop - Molde - September 20-22 2009
26. Trends in the research literature Richer models Uncertainty and risk Industrial cases Advanced heuristics DOMinant workshop - Molde - September 20-22 2009
27. Future research directions Richer models and integrated systems Focus on uncertainty, robustness and flexibility From cost minimization to profit maximization Better benchmarks DOMinant workshop - Molde - September 20-22 2009