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Supply chain optimization in the forest industry
Linköping University, Department of Mathematics, Optimization . Linköping University, The Institute of Technology.
2007 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The scope of this thesis is modelling and solving large-scale planning problems in the supply chain within the forest industry. Five research papers are included, the first three of which focus on the modelling, and the last two on the solution methods. All problems included are tactical multi-commodity problems expressed as mixed integer programming (MIP) models. The work has been done in collaboration with two Swedish companies within the forest industry.

In Paper I, a problem concerning the supply chain of forest fuel for Sydved Energileveranser AB is modelled and solved. We study the problem of deciding when and where forest residues are to be converted into wood chips, and how the residues and chips are to be transported and stored in order to satisfy energy demand at heating plants. The company has long-term contracts with forest owners and saw mills. Decisions in the model include whether or not additional harvest areas and saw mills are to be contracted and which terminals to use. The planning horizon is one year and monthly time periods are used.

Papers II--V are based on planning problems at Södra Cell AB. The planning horizon is normally one year. Papers II--III consider only one time period. In Paper II the supply chain from pulp mills to customers is modelled and the combined problem of deciding terminal locations and which ship routes to use is studied. Shipping vessels chartered on short or long term are used to transport products to terminals in Europe. From each terminal, the products are transported to customers by truck, train, or a combination of both. In addition, trains and trucks can be used for transports directly to customers from mills. In Paper III the entire supply chain, from harvest areas to customers, is considered. Decisions included are transportation of raw materials, production mix, the distribution of pulp products, and the selection of potential orders and their quantities at customers. The ship routes are considered as flow links.

In Papers IV--V the problems in Papers II--III are combined into one model and several time periods are used. Lagrangian heuristics based on Lagrangian decomposition are used as solution methods in both papers. In Paper IV, the approach leads to subproblems for each time period, whereas in Paper V, another approach that results in subproblems for different parts of the supply chain is developed.

All models are based on real data from the companies. The models are detailed and describe the problems accurately. The solution methods are developed such that the solution time is kept within practical limits. Results from Papers II--III have been used by Södra Cell AB to support the change of the terminal structure as well as in budget planning.

Abstract [sv]

Denna avhandling presenterar matematiska modeller och lösningsmetoder för optimering av olika logistikproblem inom skogsindustrin. Vi studerar försörjningskedjor för skogsbränsle och massaproduker, och beaktar den årliga planeringen i syfte att optimera flödet.

Det första problemet behandlar skogsbränsle och är ett samarbete med Sydved Energileveranser AB. Råmaterial i form av grenar och toppar från avverkningsplatser ska flisas och transporteras till värmeverk, eventuellt via terminaler. Det finns möjlighet att flisa både i skogen och på terminaler. Biprodukter från sågverk kan också användas som råmaterial. Vid behov kan utbudet av råmaterial utökas genom att fler avverkningsplatser och sågverk kontrakteras. Värmeverken har en efterfrågan, angiven i kWh per månad, som ska uppfyllas. Exempel på beslut som ska tas är var flisning ska ske, om nya avverkningsplatser ska kontrakteras, var lagring ska ske, samt hur och när skogsbränslet ska transporteras.

Nästföljande problem behandlar massaprodukter och är ett samarbete med Södra Cell AB. Olika sorters massaved från skogen och biprodukter från sågverk utgör råmaterial för produktion av massaprodukter. Råmaterialet transporteras till massabruk för tillverkning enligt specificerade recept. De färdiga produkterna transporteras sedan med fartyg till terminaler i Europa. Från terminalerna transporteras produkterna vidare till pappersbruk, vilka är företagets slutkunder. Massaprodukterna transporteras i vissa fall med lastbil eller tåg direkt från massabruken till kunderna. Efterfrågan är angiven inom vissa gränser i olika order. Vissa order är fasta, vilket innebär att dess efterfrågan måste uppfyllas, medan andra order är fria. Exempel på beslut som ska tas är vilka bruk olika produkter ska produceras på, hur många och vilka terminaler som ska användas, samt hur transporterna ska utföras för att ge bästa resultat.

Utifrån ovanstående beskrivningar har matematiska modeller formulerats. Ge-nom att lösa dessa kan vi få svar på logistik- och transportfrågorna och ett optimalt flöde kan hittas. För att lösa modellerna har kommersiell programvara använts. Heuristiker och mer avancerade optimeringsmetoder har också utvecklats i syfte att producera bra lösningar snabbare.

Place, publisher, year, edition, pages
Matematiska institutionen , 2007.
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1105
Keyword [en]
Supply chain, logistics, forestry, optimization, modelling, transportation, mixed integer programming models
Keyword [sv]
försörjningskedjor, logistik, optimering, modellering, transportplanering, blandade heltalsproblem, skogsindustrin
National Category
Computational Mathematics
Identifiers
URN: urn:nbn:se:liu:diva-8856ISBN: 978-91-85831-85-2 (print)OAI: oai:DiVA.org:liu-8856DiVA: diva2:23550
Public defence
2007-06-01, C3, C-huset, Linköpings universitet, Linköping, 10:15 (English)
Opponent
Supervisors
Note
Article 4 was a manuscript entitled "Solving a multi-period supply chain problem for a pulp industry using Lagrangian heuristics based on time periods" at the time of the thesis defence. Available from: 2007-05-14 Created: 2007-05-14 Last updated: 2009-04-28
List of papers
1. Supply chain modelling of forest fuel
Open this publication in new window or tab >>Supply chain modelling of forest fuel
2004 (English)In: European Journal of Operational Research, ISSN 0377-2217, Vol. 158, no 1, 103-123 p.Article in journal (Refereed) Published
Abstract [en]

We study the problem of deciding when and where forest residues are to be converted into forest fuel, and how the residues are to be transported and stored in order to satisfy demand at heating plants. Decisions also include whether or not additional harvest areas and saw-mills are to be contracted. In addition, we consider the flow of products from saw-mills and import harbors, and address the question about which terminals to use. The planning horizon is one year and monthly time periods are considered. The supply chain problem is formulated as a large mixed integer linear programming model. In order to obtain solutions within reasonable time we have developed a heuristic solution approach. Computational results from a large Swedish supplying entrepreneur are reported.

Keyword
Supply chain management, Integer programming, Inventory, Transportation
National Category
Mathematics
Identifiers
urn:nbn:se:liu:diva-14461 (URN)10.1016/S0377-2217(03)00354-0 (DOI)
Available from: 2007-05-14 Created: 2007-05-14 Last updated: 2013-11-07
2. A combined terminal location and ship routing problem
Open this publication in new window or tab >>A combined terminal location and ship routing problem
2006 (English)In: Journal of the Operational Research Society, ISSN 0160-5682, Vol. 57, no 8, 928-938 p.Article in journal (Refereed) Published
Abstract [en]

In this paper, we consider a combined terminal location and ship routing problem at Södra Cell AB. The purpose is to supply the customers' annual demand for pulp products while minimizing the distribution costs. Customers are supplied with various pulp products from pulp mills in Scandinavia by ships, trains, or lorries. The ship routes go from the pulp mills to terminals in Europe. From each terminal, the products are transported to customers by lorry, train, or barge. Some customers can be supplied directly from the pulp mills by trains or lorries. We have developed a mathematical model to select which terminals to use and, at the same time, determine the shipping routes. The mixed integer programming model was solved directly using a commercial solver. When the number of routes generated is large, the time required to obtain an optimal solution is too long. Hence, we have developed heuristics in order to obtain an acceptable solution in reasonable time. In addition to the basic case, five different scenarios were tested. Our heuristics provide solutions that are within 0.12% of the optimal ones.

Keyword
mixed integer programming, facility location, transportation, ship routing
National Category
Mathematics
Identifiers
urn:nbn:se:liu:diva-14462 (URN)10.1057/palgrave.jors.2602057 (DOI)
Available from: 2007-05-14 Created: 2007-05-14 Last updated: 2013-11-07
3. Integrated production and distribution planning for S¨odra Cell AB
Open this publication in new window or tab >>Integrated production and distribution planning for S¨odra Cell AB
2007 (English)In: Journal of Mathematical Modelling and Algorithms, ISSN 1570-1166, Vol. 6, no 1, 25-45 p.Article in journal (Refereed) Published
Abstract [en]

In this paper we consider integrated planning of transportation of raw material, production and distribution of products of the supply chain at Södra Cell AB, a major European pulp mill company. The strategic planning period is one year. Decisions included in the planning are transportation of raw materials from harvest areas to pulp mills, production mix and contents at pulp mills, distribution of pulp products from mills to customer via terminals or directly and selection of potential orders and their levels at customers. Distribution is carried out by three different transportation modes; vessels, trains and trucks. We propose a mathematical model for the entire supply chain which includes a large number of continuous variables and a set of binary variables to reflect decisions about product mix and order selection at customers. Five different alternatives regarding production mix in a case study carried out at Södra Cell are analyzed and evaluated. Each alternative describes which products will be produced at which pulp mills.

Keyword
supply chain management; production planning; modelling; transportation; distribution, integer programming
National Category
Mathematics
Identifiers
urn:nbn:se:liu:diva-14463 (URN)10.1007/s10852-006-9048-z (DOI)
Available from: 2007-05-14 Created: 2007-05-14
4. Solving a multi-period supply chain problem for a pulp company using heuristics—An application to Södra Cell AB
Open this publication in new window or tab >>Solving a multi-period supply chain problem for a pulp company using heuristics—An application to Södra Cell AB
2008 (English)In: International Journal of Production Economics, ISSN 0925-5273, E-ISSN 1873-7579, Vol. 116, no 1, 75-94 p.Article in journal (Refereed) Published
Abstract [en]

In this paper, the integrated planning of production and distribution for a pulp company is considered. The tactical decisions included regard transportation of raw materials from harvest areas to pulp mills; production mix and contents at pulp mills; inventory; distribution of pulp products from mills to customers and the selection of potential orders and their levels at customers. The planning period is one year and several time periods are included. As a solution approach we make use of two different heuristic approaches. The main reason to use heuristics is the need for quick solution times. The first heuristic is based on a rolling planning horizon where iteratively a fixed number of time periods is taken into consideration. The second heuristic is based on Lagrangian decomposition and subgradient optimization. This provides optimistic bounds of the optimal objective function value that are better than the LP relaxation value, which can be used as a measure of the heuristic (pessimistic) solution quality. In addition, we apply the proposed rolling horizon heuristic in each iteration of the subgradient optimization. A number of cases based on real data is analysed which shows that the proposed solution approach is simple and provides high quality solutions.

Place, publisher, year, edition, pages
Elsevier, 2008
Keyword
Supply chain modelling, Production planning, Heuristics, Lagrangian decomposition
National Category
Social Sciences
Identifiers
urn:nbn:se:liu:diva-14850 (URN)10.1016/j.ijpe.2008.07.010 (DOI)000261007900006 ()
Note

Original publication: Helene Gunnarsson and Mikael Rönnqvist, Solving a multi-period supply chain problem for a pulp company using heuristics—An application to Södra Cell AB, 2008, International Journal of Production Economics. http://dx.doi.org/10.1016/j.ijpe.2008.07.010. Copyright: Elsevier B.V., http://www.elsevier.com/

Available from: 2008-09-26 Created: 2008-09-26 Last updated: 2017-12-13Bibliographically approved
5. Solving a multi-period supply chain problem for a pulp industry using Lagrangian heuristics based on physical stages
Open this publication in new window or tab >>Solving a multi-period supply chain problem for a pulp industry using Lagrangian heuristics based on physical stages
Manuscript (Other academic)
Identifiers
urn:nbn:se:liu:diva-14465 (URN)
Available from: 2007-05-14 Created: 2007-05-14 Last updated: 2010-01-13

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