Advanced planning and scheduling in supply chain systems

Abstract

ABSTRACT Supply chain management covers all of the activities from raw material procurement to final delivery of orders to customers. Since it involves different activities with different nature, planning and scheduling plays an integral part in the operation of the supply chain systems. Traditionally, the supply chain systems were optimized by dividing the planning and scheduling problems into smaller subproblems in order to avoid difficulties in modeling and solution. In addition, the market models and inclusion of logistics related activities also treated separately. The objective in this thesis is to develop advanced planning and scheduling models for the optimal operation of supply chain systems that include market models, production and inventory models and logistics models Marketing decisions that affect the level of demand for a product have a very strong impact on the operation of supply chain systems. One of the most important marketing decisions is the price that has a strong influence in the demand level and consequently determines the level of revenue and profit. Therefore, in our perspective, price is considered as a decision variable to adjust the level of demand and counteract the rapid changes in order levels. However, considering price as a decision variable introduces bilinear terms that are nonconvex into the objective function whenever the objective function includes revenue terms. The logistics decisions and transportation infrastructure imposes some constraints on the operation of a supply chain. The planning and scheduling of operations in production facilities has a profound effect impact on the optimization of supply chains. When all of the activities in a supply chain system are considered in an integrated manner, the resulting model can become intractable due to the fact that these activities occur at different time scales. We also present an advanced modeling approach to effectively integrate these activities. The resulting planning and scheduling model is a bilinear optimization problem with discrete decision variables. A novel global optimization algorithm is developed to solve this class of problems. The developed advanced planning and scheduling models are illustrated with several examples. The efficiency of the proposed global optimization algorithm is verified on benchmark problems and on a supply chain model. Keywords: Supply Chain, market model, logistics and transportation model, production model, bilinear global optimization algorithm IV