Philip Hedenstierna

Multi-Objective Optimisation in Manufacturing Supply Chain Systems Design: A Comprehensive Survey and New Directions

Research regarding supply chain optimisation has been performed for a long time. However, it is only in the last decade that the research community has started to investigate multi-objective optimisation for supply chains. Supply chains are in general complex networks composed of autonomous entities whereby multiple performance measures in different levels, which in most cases are in conflict with each other, have to be taken into account. In this chapter, we present a comprehensive literature review of existing multi-objective optimisation applications, both analytical-based and simulation-based, in supply chain management publications. Later on in the chapter, we identify the needs of an integration of multi-objective optimisation and system dynamics models, and present a case study on how such kind of integration can be applied for the investigation of bullwhip effects in a supply chain.

Integrative purchasing and inventory control at sawnwood retailer – case study

Purchasing order methods and inventory control are vital elements in fulfilling customer orders and building internal performance; this is particularly the case in retailing operations. In this manuscript, we develop different scenarios for various order methods for a wood retailer, where the performance of the different methods is evaluated through simulation, whereupon the fit between environments and methods is compared. Our results indicate that only simple environments follow analytical cost and service level calculations, while increasing complexity increases the synchronisation need between forecasts and reordering methods. In our research we also compare different ordering methods, and find that while the reorder point method is the most robust solution from the retailer’s perspective, it could lead to distortion within entire wood supply chain.

An integrative approach to inventory control

Inventory control systems consist of three types of methods: forecasting, safety stock sizing and order timing and sizing. These are all part of the interpretation of a planning environment to generate replenishment orders, and may consequently affect the performance of a system. It is therefore essential to integrate these aspects into a complete inventory control process, to be able to evaluate different methods for certain environments as well as for predicting the overall performance of a system. In this research a framework of an integrated inventory control process has been developed, covering all relations from planning environment to performance measures. Based on this framework a simulation model has been constructed; the objective is to show how integrated inventory control systems perform in comparison to theoretical predictions as well as to show the benefits of using an integrated inventory control process when evaluating the appropriateness of inventory control solutions. Results indicate that only simple applications (for instance without forecasts or seasonality) correspond to theoretical cost and service level calculations, while more complex models (forecasts and changing demand patterns) show the need for tight synchronization between forecasts and reordering methods. As the framework describes all relations that affect performance, it simplifies the construction of simulation models and makes them accurate. Another benefit of the framework is that it may be used to transfer simulation models to real-world applications, or vice versa, without loss of functionality.