MULTI-OBJECTIVE ANALYSIS OF A PRODUCTION-DISTRIBUTION SYSTEM

Guide: Mr. Vinay V Panicker

Presented by Yasoda Sreeram Kalluri M120408ME

Outline of Presentation
Introduction Literature review Research gaps identified Assumptions Problem definition Work done so far Further work Conclusions References
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Introduction
In manufacturing industries such as automotive and electronics, distribution cost constitute one of the largest cost components. This trend has created a closer interaction between the different stages of a supply chain, which increased the practical usefulness of the coordinated decision models. This work deals with the coordination of production and distribution functions in a supply chain
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Introduction cont
Production and distribution operations are the two most important operational functions in a supply chain In order to achieve the optimal operational performance in a supply chain, it is critical to integrate production and distribution functions Multi-objectives are obvious in most of the practical decision making problems
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Introduction cont
In a supply chain, cost and service level are the two main objectives of interest which are conflicting in nature These types of conflicting objectives require multi-objective analysis

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Literature review
The various research on the productiondistribution systems reported in the literature are categorized based on the following criteria:
1. 2. 3. 4. 5. 6.
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Problem objective Objective function Solution methodology Decision level Integration structure Planning horizon
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Literature review contd

Problem objective: The problem objective classifies the problem to be a minimization or a maximization problem.
Objectives include
Maximization or Minimization

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Literature review contd

Objective function: The objective function describes the various decisions to be considered in the problem analysis.
Objective functions include

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Total weighted tardiness Total distribution cost Maximum lateness Total flow time Total completion times, etc.,
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Literature review contd

Solution methodology: To solve the formulated model, researchers adopt different solution methodologies such as:
Genetic algorithm Simulated annealing Tabu search algorithm Artificial immune systems algorithm, etc.,

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Literature review contd

Decision Level: According to Chen (2004), the decision levels are classified as follows:
Tactical models (A1) Operational models (A2) Operational and tactical models (A3)

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Literature review contd

Tactical models (A1): In this decisions mainly involves:
how much to produce how much to ship in a time period how long the production cycle/distribution cycle should be how much inventory to keep

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Literature review contd

Operational models (A2): In this decisions mainly involves
when and on which machine to process a job when and by which vehicle to deliver a job which route to take for a vehicle

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Literature review contd

Integration Structure: The integration between production and distribution operations leads to the following three types of structures (Chen, 2004):
Integration of production and outbound transportation (B1) Integration of inbound transportation and production (B2) Integration of inbound transportation, production, and outbound transportation (B3)
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Literature review contd

Integration of production and outbound transportation: Products are delivered from manufacturers to customers after they are produced by manufacturers. Integration of inbound transportation and production: Suppliers supply raw materials or semi-finished products to manufacturers where final products are produced.
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Literature review contd

Planning horizon: Based on the planning horizon, the production-distribution models can be classified in literature as:
One time period (C1) Multiple time periods with dynamic demand (C2)

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Literature review contd

Reference Problem objective
Vanbuer et al. (1999)

Objective function

Solution Decision methodology level

A3

Integration Planning structure horizon

B1 C1

Minimizatio Cost of owing Heuristic n trucks and search Operating algorithms costs Moon et Minimizatio Tardiness Genetic al.(2002) n algorithm based heuristic approach Hall and Minimizatio Total flow Dynamic Potts (2003) n time + total programming distribution algorithm cost

A3

B2

C1

A2

B3

C1

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Literature review contd

Reference Problem objective
Hall and Minimization Potts (2005)

Objective function

Solution methodology
Dynamic programming algorithm Heuristics

Decision level
A2

Integration Planning structure horizon

B1 C1

Pundoor and Chen (2005)

Agnetis et al.(2005)

scheduling cost + the delivery cost Minimization Delivery tardiness and Total distribution cost Minimization Total interchange + Buffer storage cost

A2

B1

C1

Efficient algorithms

A2

B2

C1

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Literature review contd

Reference Problem objective
Naso et al..(2006) Minimization

Objective function

Solution Decision methodology level

A3

Integration Planning structure horizon

B1 C1

Overall cost Meta-heuristic (transportati approach based on, on genetic outsourcing, algorithm overtime, hiring trucks) Demirli and Minimization Overall Mixed-integer Yimer operating fuzzy (2008) costs programming Wang and Minimization Make span Heuristics Cheng (2009)

A3

B3

C2

A3

B3

C1

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Literature review contd

Reference Problem objective
Kumar et al. (2010) Minimization

Objective Solution Decision function methodology level

Tardiness Fuzzy incorporate artificial immune system algorithm Proportional allocation algorithms A2

Integration Planning structure horizon

B1 C1

Hall and Liu (2010)

Minimization

Total cost

A3

B1

C2

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Literature review contd..

Reference Problem objective
Steinrucke (2011) Minimization

Objective function

Solution methodology

Decision Integration Planning level structure horizon

A3 B3 C1

Cakici et al (2011)

Production Mixed-integer cost + decision-making transportation model and cost - bonus Relaxing and/or payments fixing Heuristic Minimization Total weighted Heuristics based tardiness on a genetic + algorithm total distribution cost

A2

B1

C1

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Research gaps identified

1. Most of the production-distribution problem assumes a homogenous fleet of vehicles. There can be heterogeneous fleet of vehicles in the model. 2. The production-distribution problem uses a direct shipping strategy from supplier to each customer. Routing can be considered in the model.
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Research gaps identified cont

3. Researchers consider a penalty cost for tardiness, while a bonus/penalty can be incorporated for earliness. 4. Multiple orders are received by one manufacturer but there can be multiple customers with multiple manufacturers. This situation needs further study.

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Assumptions
1. Jobs are available at the beginning of planning horizon 2. All the machines are available throughout the scheduling period 3. An order once taken up is completed fully before another order is taken 4. An operation is not stopped in the midway for another operation 5. Processing times for all orders are known and deterministic
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Assumptions cont..
6. All orders are processed in a single production line 7. No limitation for availability of vehicles 8. For every order one vehicle is dedicated for its delivery whether it is assigned or not 9. Capacity of vehicle is more than maximum quantity of one order

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Problem definition
Make-to-order production-distribution system with one manufacturer and one or more customers. Customers places orders to manufacturer. Orders are received by manufacturer are processed on a single production line and delivered to the customer according to the weight associated with the order. By relaxing the assumptions 8 and 9 and implementing the research gaps 1,2 and 3.
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Work done so far

The production distribution problem specified in Cakici et al. (2011) is adopted for further study The mathematical model present in that problem is modeled in an optimization modelling software, LINGO 11.0 Global optimum solution was found

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Work done so far cont..

Problem: Considering same problem statement without relaxing any assumptions.
Each order is associated with

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Volume of the jobs Due date of the order Penalty cost associated with the order for late delivery Processing time of order Time required to perform trip Distribution cost associated with trip
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Work done so far cont..

Objective is to minimize the total weighted tardiness and distribution cost Scalarization or weighted-sum method is applied to combine both the objectives by assigning weights to each objective and change the whole problem as a singleobjective optimization problem (Caramia and Dellolmo, 2008).
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Work done so far cont..

Mathematical model
The mathematical model for an integrated analysis of production-distribution systems adopted from Cakici et al.(2011) Notations used

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J set of orders such that J {1, 2 . . . n} B set of vehicle trips such that B {1, 2 . . . n} n total number of trips or orders capacity of a vehicle
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Work done so far cont..

-time required to perform the trip b B -distribution cost for trip b B -time at which order j J finishes its required processing -time at which trip b B starts its delivery -time at which job j J finishes its required processing time job j J is delivered processing time of the order j J

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Work done so far cont..

penalty for order j J

volume of the order j J

due date of order j J tardiness of order j J

weight associated with total weighted tardiness

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Work done so far cont..

=1, if job i J immediately precedes job j J

=0, otherwise. =1, if job j J is assigned to trip k B

=0, otherwise =1, if trip b B is performed =0, otherwise.

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Work done so far cont..

Objective function: The objective function of this production distribution problem is to minimize the total weighted tardiness (TWT) of all jobs and total transportation cost (TC) of all deliveries.
Minimize
Z =
;

+ 1

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Work done so far cont..

Subjected to the constraints
1. Jobs are assigned to a single production line (machine) with a unique predecessor and a unique successor,
;

= 1, for all i J ; = 1, for all i J

2. In order to process job j immediately after job i, job i J completes time units before job j J:
- + (1- )M, for all i J, j J, j 0, i j

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Work done so far cont..

3. Jobs are assigned to one of the available trips that are associated with the same customer
=1

=1,

for all j J

4. Vehicle capacity constraint

=1

, for all k B

5. A vehicle cannot start its delivery until all jobs to be delivered in the corresponding batch have finished their processing
- (1- )M,
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for all i J, b B, i0.

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Work done so far cont..

6. is the delivery start time plus the delivery time
+ - (1- )M, for all i J, b B, i0.

7. Each possible trip should be performed if any job is assigned to it

,

for all b B.

8. The tardiness of the jobs is calculated using the following relationship

Tardiness=Max{0,( - )} or for all i J. - ,
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Work done so far cont..

Generation of input data
The vehicle capacity is assumed to be 50 units Weight () is a continuous value between (0,1) The processing times, job due times, transportation times, transportation costs, penalty for late delivery are randomly generated following DU [1,10] Volume of the order is randomly generated following DU[10,20]
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Work done so far cont..

Results and Discussion
The possibility of job i precedes itself is eliminated by using a membership filter operator in LINGO 11.0 Two dummy orders one at the starting and other at the ending are considered for sake of jobs starting at time zero With the creation of these two dummy orders always the number of orders are increased by two
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Work done so far cont..

If customer places n orders to manufacturer while solving this problem by LINGO the number of input orders enters for each attribute become n+2

For dummy orders, the values for the attributes such as the penalty, processing time, due date, time required to perform trip and size of the order are assumed as zero.

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Work done so far cont..

Since it is a minimization problem the distribution cost for dummy jobs is assumed a large value otherwise all jobs are assigned to dummy trips whose cost is zero. Example for n=5 and =0.6
Processing times=0 3 5 7 0 Weight(penalty cost)= 0 9 7 6 0 Volume of order= 0 15 20 15 0
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Work done so far cont..

Due date= 0 2 1 2 0 Transportation time=0 4 3 2 0 Delivery cost=M 2 4 2 M Capacity of vehicle= 50 =0.6

Optimal solution is found using LINGO

Objective value= 122.6 (TWT=119.4.8,TC=3.2) Production sequence

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1-2-3-4-5-1 (X12=X23=X34=X45=X51=1)
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Work done so far cont..

Completion times= 0 3 8 15 0 Order(j) assigned to trip(k)=Yjk
Y14=Y24=Y33=Y42=Y54=1

Delivery times=7187 5 11 19 1035 Trip performed

Z1=Z5=0; Z2=Z3=Z4=1

Tardiness values=7187 3 10 17 1035

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Work done so far cont

Manufacturer
1

Trucks
1
2
T=4

Customers
1
2
Del-11

2
W=9, p=3

3
W=7, p=5

3
T=3

3
Del-8

4
W=6, p=7

4
T=2

4
Del-5

5
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5
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Work done so far cont..

The computational time taken to obtain a solution with =0.6 for different number of orders in LINGO is tabulated. All the tests are performed on PC with an Intel Core 2 Duo processor(3 GHz) with 3 GB RAM.

* Solver is interrupted to get a feasible solution

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Work done so far cont..

It is inferred from the table that as number of orders increases, the computational time also increases
Sl no 1 2 Number of orders from customers (n) 2 3 Computational time (hh:mm:ss) 00:00:00 00:00:11

3 4
5 6
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4 5*
6* 7*

00:06:32 10:36:27
12:15:51 15:10:32
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Work done so far cont..

To investigate the effect of the weight associated with total weighted tardiness on the computational time, the weight is varied from 0 to 1 in steps of 0.1. The change of computational time with respect to the weight is depicted It is understood that the computational time high as the weight (=0.8). The computational time is less when the priority for distribution cost is high compared to tardiness.
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Work done so far cont..

Computational time in sec
12 10 8 6 Number of orders = 3 Number of orders =2

4
2 0 =0 =0.1 =0.2 =0.3 =0.4 =0.5 =0.6 =0.7 =0.8 =0.9 =1

900 800 700 600 500 400 300 200 100 0

Computational time in sec

Number of orders = 4

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Work done so far cont

Cakici et al. (2011)
Multi objective problem is considered as it is

Proposed model
Multi objective is converted into single objective by scalarization method (i.e., by assigning some weights(priority) to each objective)

Priority of the orders are considered in the form of weights

Problem is solved by using non dominated sorting genetic algorithm (NSGA-II) NSGA-II used doesnt assure optimal solution gives only near optimal solution for productiondistribution problem.
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Penalty of late delivery is considered in the form of weight

Problem is solved by using LINGO 11.0 an optimization modelling software LINGO 11.0 assures an optimal solution for productiondistribution problem.
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Further work
Investigate the possibility of revising constraints for better computational time Search for an efficient heuristic to get near optimal solution within less computational time Formulate the constraints for heterogeneous fleet of vehicles instead of homogeneous fleet. To incorporate the bonus/penalty payment for early delivery
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Further work contd

To incorporate the routing for delivery of orders to customers instead assigning one vehicle to each trip whether it is assigned or not.

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Conclusions
From the literature review different problem environments its associated assumptions and research gaps are perceived The production distribution problem adopted from Cakici et al. (2011) was modelled in LINGO and a global optimum solution was found Analysed the solutions obtained by different weights associated with total weighted tardiness () with respect to computational time.
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References
Agnetis, A., Hall, N. G., & Pacciarelli, D., 2006. Supply chain scheduling: Sequence coordination. Discrete Applied Mathematics, 154, 20442063 Alebachew D., & Demirli, Y. K., 2008. Fuzzy scheduling of a build-to-order supply chain. International Journal of Production Research, 46, 39313958. Cakici,E., Mason,S.J., & Kurz, M.E., 2011. Multiobjective analysis of an integrated supply chain scheduling problem. International Journal of Production Research 50 (10), 26242638
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References cont
Caramia, M., and Dellolmo, P., 2008, Multi-objective management in freight logistics increasing capacity, service level and safety with optimization algorithms, SpringerVerlag London Limited., ISBN-13: 9781848003811, pp. 1425. Chen, Z. L., (2004), Integrated Production and Distribution Operations: Taxonomy, Models, and Review. In D. SimchiLevi, S. D. Wu, & Z. J. Shen (Eds.), Handbook of quantitative supply chain analysis: modelling in the e-business era, pp. 711746 Hall, N.G. & Potts, C.N., 2003. Supply chain scheduling: Batching and delivery. Operations Research, 51, 566584

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References cont
Hall, N.G. & Potts, C.N., 2005. The coordination of scheduling and batch deliveries. Annals of Operations Research, 135, 4164 Halls, N. G. & Liu, Z., 2010. Capacity allocation and scheduling in supply chains. Operations research. 58 (6), 17111725 Kumar, V., Mishra, N., Chan, F. T. S., & Verma, A., 2011. Managing warehousing in an agile supply chain environment: an F-AIS algorithm based approach. International Journal of Production Research. 49 (21), 64076426
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References cont
Moon, C., Kim, J., & Hur, S., 2002. Integrated process planning and scheduling with minimizing total tardiness in multi-plants supply chain. Computers & Industrial Engineering, 43(1-2), 331-349 Naso, D., Surico, M., Turchiano, B., & Kaymak, U., 2007. Genetic algorithms for supply-chain scheduling: A case study in the distribution of ready-mixed concrete. European Journal of Operational Research, 177(3), 2069-2099 Pundoor, G. & Chen, Z.L., 2005. Scheduling a productiondistribution system to optimize the tradeoff between delivery tardiness and distribution cost. Naval Research Logistics, 52, 571-589

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References cont
Steinrucke, M., 2011. An approach to integrate production-transportation planning and scheduling in aluminum supply chain network. International Journal of Production Research. 49 (21), 65596583 Van Buer, M. G., Woodruff, D.L., & Olson, R. T., 1999. Solving the medium newspaper production/distribution problem. European Journal of Operational Research. 115(2), 237-253 Wang X. & Cheng, T.C.E., 2009. Production scheduling with supply and delivery considerations to minimize the makespan. European Journal of Operational Research. 194 (3), 743752
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Thank you
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