Luis Guimarães

Modeling lotsizing and scheduling problems with sequence dependent setups

Several production environments require simultaneous planing of sizing and scheduling of sequences of production lots. Integration of sequencing decisions in lotsizing and scheduling problems has received an increased attention from the research community due to its inherent applicability to real world problems. A two-dimensional classification framework is proposed to survey and classify the main modeling approaches to integrate sequencing decisions in discrete time lotsizing and scheduling models. The Asymmetric Traveling Salesman Problem can be an important source of ideas to develop more efficient models and methods to this problem. Following this research line, we also present a new formulation for the problem using commodity flow based subtour elimination constraints. Computational experiments are conducted to assess the performance of the various models, in terms of running times and upper bounds, when solving real-word size instances.

Annual production budget in the beverage industry

Driven by a real-world application in the beverage industry, this paper provides a design of a new VNS variant to tackle the annual production budget problem. The problem consists of assigning and scheduling production lots in a multi-plant environment, where each plant has a set of filling lines that bottle and pack drinks. Plans also consider final product transfers between the plants. Our algorithm fixes setup variables for family of products and determines production, inventory and transfer decisions by solving a linear programming (LP) model. As we are dealing with very large problem instances, it is inefficient and unpractical to search the entire neighborhood of the incumbent solution at each iteration of the algorithm. We explore the sensitivity analysis of the LP to guide the partial neighborhood search. Dual-reoptimization is also used to speed-up the solution procedure. Tests with instances from our case study have shown that the algorithm can substantially improve the current business practice, and it is more competitive than state-of-the-art commercial solvers and other VNS variants.

Pricing, relaxing and fixing under lot sizing and scheduling

We present a novel mathematical model and a mathematical programming based approach to deliver superior quality solutions for the single machine capacitated lot sizing and scheduling problem with sequence-dependent setup times and costs. The formulation explores the idea of scheduling products based on the selection of known production sequences. The model is the basis of a matheuristic, which embeds pricing principles within construction and improvement MIP-based heuristics. A partial exploration of distinct neighborhood structures avoids local entrapment and is conducted on a rule-based neighbor selection principle. We compare the performance of this approach to other heuristics proposed in the literature. The computational study carried out on different sets of benchmark instances shows the ability of the matheuristic to cope with several model extensions while maintaining a very effective search. Although the techniques described were developed in the context of the problem studied, the method is applicable to other lot sizing problems or even to problems outside this domain.

A decision support system for the operational production planning and scheduling of an integrated pulp and paper mill

Abstract Production planning and scheduling in the process industry in general and in the pulp and paper (P&P) sector in particular can be very challenging. Most practitioners, however, address those activities relying only on spreadsheets, which is time-consuming and sub-optimal. The literature has reported some decision support systems (DSSs) that are far from the state-of-the-art with regard to optimization models and methods, and several research works that do not address industrial issues. We contribute to reduce that gap by developing and describing a DSS that resulted from several iterations with a P&P company and from a thorough review of the literature on process systems engineering. The DSS incorporates relevant industrial features (which motivated the development of a specific model), exhibits important technical details (such as the connection to existing systems and user-friendly interfaces) and shows how optimization can be integrated in real world applications, enhanced by key pre- and post-optimization procedures.

INDUSTRIAL INSIGHTS INTO LOT SIZING AND SCHEDULING MODELING

Lot sizing and scheduling by mixed integer programming has been a hot research topic in the last 20 years. Researchers have been trying to develop stronger formulations, as well as to incorporate real-world requirements from different applications. This paper illustrates some of these requirements and demonstrates how small- and big-bucket models have been adapted and extended. Motivation comes from different industries, especially from process and fast-moving consumer goods industries.

Annual Distribution Budget in the Beverage Industry: A Case Study

Unicer, a major Portuguese beverage company, improved its tactical distribution planning decisions and study alternative scenarios for its supply strategies and network configuration as result of an operations research OR-driven process. In this paper, we present the decision support system responsible for this new methodology. At the core of this system is a mathematical programming-based heuristic that includes decision variables that address transportation and inventory management problems. Unicer runs a set of production and distribution platforms with various characteristics to fulfill customers demand. The main challenge of our work was to develop a tactical distribution plan, which Unicer calls an annual distribution budget, as realistically as possible without jeopardizing the nature of the strategic and tactical tool. The company had a complex tactical distribution planning problem because of the increasing variety of its stock-keeping units and its need for a flexible distribution network to satisfy its customers, who demand a very fragmented set of products. Atypical flows of finished products from Unicers distribution centers to its production platforms are a major cause of this complexity, which yields an intricate supply chain. The quality of the solutions we provided and the implementation of a user-friendly interface and editable inputs and outputs for our decision support system motivated company practitioners to use it. Unicer saves approximately two million euros annually and provides better information to its decision makers. As a result, these decision makers now view their operations from a more OR-based perspective.

Using Analytics to Enhance a Food Retailer’s Shelf-Space Management

This paper describes the results of our collaboration with the leading Portuguese food retailer to address the shelf-space planning problem of allocating products to shop-floor shelves. Our challenge was to introduce analytical methods into the shelf-space planning process to improve the return on space and automate a process heavily dependent on the experience of the retailer’s space managers. This led to the creation of GAP, a decision support system that the company’s space-management team uses daily. We developed a modular operations research approach that systematically applies mathematical programming models and heuristics to determine the best layout of products on the shelves. GAP combines its analytical strength with an ability to incorporate different types of merchandising rules to balance the tradeoff between optimization and customization.

A long-haul freight transportation problem: Synchronizing resources to deliver requests passing through multiple transshipment locations

This research aims at tackling a real-world long-haul freight transportation problem where tractors are allowed to exchange semi-trailers through several transshipment points until a request reaches its destiny. The unique characteristics of the considered logistics network allow for providing long-haul services by means of short-haul jobs, drastically reducing empty truck journeys. A greater flexibility is achieved with faster responses. Furthermore, the planning goals as well as the nature of the considered trips led to the definition of a new problem, the long-haul freight transportation problem with multiple transshipment locations. A novel mathematical formulation is developed to ensure resource synchronization while including realistic features, which are commonly found separately in the literature. Considering the complexity and dimension of this routing and scheduling problem, a mathematical programming heuristic (matheuristic) is developed with the objective of obtaining good quality solutions in a reasonable amount of time, considering the logistics business context. We provide a comparison between the results obtained for 79 real-world instances. The developed solution method is now the basis of a decision support system of a Portuguese logistics operator (LO).

Low skill wages and mismeasured inflation

ABSTRACT The current literature presents evidence that the real wage of male workers at the 10th percentile of the wage distribution has fallen since 1970. Yet, contributions within this literature deflate nominal wages using a mismeasured deflator. Another strand of literature documents that the mismeasurement of the deflator is sizable, with recent estimates exceeding0.6 percentage points per year. In this paper, I adjust the deflator and reestimate the implied evolution of male low skill wages. This simple exercise implies that male low skill wages were about 15 log-points higher in 2013 than in 1970.

Modeling Lot Sizing and Scheduling in Practice

Lot sizing and scheduling by mixed integer programming has been a hot research topic in the last 20 years. Researchers have been trying to develop stronger formulations, as well as to incorporate real-world requirements from different applications. In this paper we illustrate some of these requirements and show howmodels have been adapted and extended. Motivation comes from different industries, especially from process and fast moving consumer goods industries.