Inventory policies and safety stock optimization for supply chain planning

In this article, traditional supply chain planning models are extended to simultaneously optimize inventory policies. The inventory policies considered are the (r,Q) and (s,S) policies. In the (r,Q) inventory policy an order for Q units is placed every time the inventory level reaches level r, while in the s,S policy the inventory is reviewed in predefined intervals. If the inventory is found to be below level s, an order is placed to bring the level back to level S. Additionally, to address demand uncertainty four safety stock formulations are presented: (1) proportional to throughput, (2) proportional to throughput with risk-pooling effect, (3) explicit risk-pooling, and (4) guaranteed service time. The models proposed allow simultaneous optimization of safety stock, reserve, and base stock levels in tandem with material flows in supply chain planning. The formulations are evaluated using simulation. © 2018 American Institute of Chemical Engineers AIChE J, 65: 99–112, 2019     

多期生物燃料供应链网络建模与多目标优化

建立了一个基于多目标优化以及生命周期评价（LCA）的多期生物燃料供应链模型。该模型的3个目标函数分别为总折现利润、平均单位能量生物燃料的温室气体排放和化石能源投入（economic,energy,environmental,3E）。为了将生物质生产的季节性以及库存等问题引入模型中,需要对每年进行多期划分。考虑到需要进一步引入供应链的扩张,模型的时间跨度设定为3年。此外,该模型还考虑了生物质产地、工厂,生物燃料市场的选址以及各节点间的物流流量等问题。通过将非线性的后两个目标函数利用ε-constraint法转化为线性约束条件,该模型最终被转化为混合整数线性规划（MILP）问题并得以求解。对解得的非劣解在三维坐标系上线性插值可得非劣解所在曲面,它揭示了3E目标之间的权衡取舍关系。还使用了一个基于中国国情的数据的案例对该模型进行检验。     

Multienterprise supply chain: Simulation and optimization

The advancements in connectivity among the entities belonging to industrial supply chain have given rise to more complex, global supply chain networks. These networks are often constituted of entities that belong to multiple such networks. Interactions among the entities in such networks are also influenced by whether they belong to the same enterprise or different ones. This work takes into consideration the effect of such interactions. The entities belonging to different enterprises are assumed to interact through auctions. An agent based simulation model that incorporates such auctions is used to represent multienterprise supply chain networks. The dynamics of the supply chain affected by the auction mechanism are investigated. Also a derivative free optimization methodology is proposed to find the optimal warehouse capacities for the minimization of total cost. © 2016 American Institute of Chemical Engineers AIChE J, 62: 3392–3403, 2016     

石油供应链计划层优化与不确定性风险管理模型

提出了一种基于有限场景的两阶段随机混合整数线性规划（MILP）模型,来优化不确定条件下多周期、多层级的石油工业供应链的计划层管理。模型以碳排放税的形式将减少CO₂排放的环境目标融入到经济目标之中。供应链的各级节点均以黑箱的形式存在,使模型得以简化,在时间尺度相对较长的计划层获得优化结果,为供应链的计划与管理提供指导方案。并且分析了算例最优期望收益的风险性,在此基础上引入风险管理约束,得到了带有风险管理约束的供应链计划层优化模型。该模型的结果与原模型相比,期望收益附近的收益风险性降低。     

Optimal supply chain design and operations under multi‐scale uncertainties: Nested stochastic robust optimization modeling framework and solution algorithm

Although strategic and operational uncertainties differ in their significance of impact, a “one‐size‐fits‐all” approach has been typically used to tackle all types of uncertainty in the optimal design and operations of supply chains. In this work, we propose a stochastic robust optimization model that handles multi‐scale uncertainties in a holistic framework, aiming to optimize the expected economic performance while ensuring the robustness of operations. Stochastic programming and robust optimization approaches are integrated in a nested manner to reflect the decision maker's different levels of conservativeness toward strategic and operational uncertainties. The resulting multi‐level mixed‐integer linear programming model is solved by a decomposition‐based column‐and‐constraint generation algorithm. To illustrate the application, a county‐level case study on optimal design and operations of a spatially‐explicit biofuel supply chain in Illinois is presented, which demonstrates the advantages and flexibility of the proposed modeling framework and efficiency of the solution algorithm. © 2016 American Institute of Chemical Engineers AIChE J, 62: 3041–3055, 2016     

Modular supply chain optimization considering demand uncertainty to manage risk

Supply chain under demand uncertainty has been a challenging problem due to increased competition and market volatility in modern markets. Flexibility in planning decisions makes modular manufacturing a promising way to address this problem. In this work, the problem of multiperiod process and supply chain network design is considered under demand uncertainty. A mixed integer two-stage stochastic programming problem is formulated with integer variables indicating the process design and continuous variables to represent the material flow in the supply chain. The problem is solved using a rolling horizon approach. Benders decomposition is used to reduce the computational complexity of the optimization problem. To promote risk-averse decisions, a downside risk measure is incorporated in the model. The results demonstrate the several advantages of modular designs in meeting product demands. A pareto-optimal curve for minimizing the objectives of expected cost and downside risk is obtained.     

A mathematical modeling approach for supply chain management under disruption and operational uncertainty

In this work, we proposed a two-stage stochastic programming model for a four-echelon supply chain problem considering possible disruptions at the nodes (supplier and facilities) as well as the connecting transportation modes and operational uncertainties in form of uncertain demands. The first stage decisions are supplier choice, capacity levels for manufacturing sites and warehouses, inventory levels, transportation modes selection, and shipment decisions for the certain periods, and the second stage anticipates the cost of meeting future demands subject to the first stage decision. Comparing the solution obtained for the two-stage stochastic model with a multi-period deterministic model shows that the stochastic model makes a better first stage decision to hedge against the future demand. This study demonstrates the managerial viability of the proposed model in decision making for supply chain network in which both disruption and operational uncertainties are accounted for.     

Resilient supply chain design and operations with decision-dependent uncertainty using a data-driven robust optimization approach

To addresses the design and operations of resilient supply chains under uncertain disruptions, a general framework is proposed for resilient supply chain optimization, including a quantitative measure of resilience and a holistic biobjective two-stage adaptive robust fractional programming model with decision-dependent uncertainty set for simultaneously optimizing both the economic objective and the resilience objective of supply chains. The decision-dependent uncertainty set ensures that the uncertain parameters (e.g., the remaining production capacities of facilities after disruptions) are dependent on first-stage decisions, including facility location decisions and production capacity decisions. A data-driven method is used to construct the uncertainty set to fully extract information from historical data. Moreover, the proposed model takes the time delay between disruptions and recovery into consideration. To tackle the computational challenge of solving the resulting multilevel optimization problem, two solution strategies are proposed. The applicability of the proposed approach is illustrated through applications on a location-transportation problem and on a spatially-explicit biofuel supply chain optimization problem. © 2018 American Institute of Chemical Engineers AIChE J, 65: 1006–1021, 2019     

供应链管理的优化--当前国际企业竞争力的焦点

说明了供应链管理的重要意义,介绍了供应链的定义与构成,类型及其管理软件的应用功能和可解决的问题。     

Supply chain management using an optimization driven simulation approach

In this work, we propose a hybrid simulation‐based optimization framework to solve the supply chain management problem. The hybrid approach combines a mathematical programming model with an agent‐based simulation model and uses them in an iterative framework. The optimization model is used to guide the decisions toward an optimal allocation of resources given the realistic supply chain representation given by the simulation. Thus, the proposed approach provides a more realistic solution compared to a stand‐alone optimization model, often a simplified representation of the actual system, by making use of the simulation model, which captures the detailed dynamic behavior of the system. A multiobjective problem has been formulated by taking into consideration the environmental impact of supply chain operations. The proposed framework has been applied to small‐scale case studies to study the effectiveness of the approach for such problems. © 2013 American Institute of Chemical Engineers AIChE J, 59: 4612–4626, 2013     

A bi‐criterion optimization approach for the design and planning of hydrogen supply chains for vehicle use

In this article, we address the design of hydrogen supply chains for vehicle use with economic and environmental concerns. Given a set of available technologies to produce, store, and deliver hydrogen, the problem consists of determining the optimal design of the production‐distribution network capable of satisfying a predefined hydrogen demand. The design task is formulated as a bi‐criterion mixed‐integer linear programming (MILP) problem, which simultaneously accounts for the minimization of cost and environmental impact. The environmental impact is measured through the contribution to climate change made by the hydrogen network operation. The emissions considered in the analysis are those associated with the entire life cycle of the process, and are quantified according to the principles of Life Cycle Assessment (LCA). To expedite the search of the Pareto solutions of the problem, we introduce a bi‐level algorithm that exploits its specific structure. A case study that addresses the optimal design of the hydrogen infrastructure needed to fulfill the expected hydrogen demand in Great Britain is introduced to illustrate the capabilities of the proposed approach. © 2009 American Institute of Chemical Engineers AIChE J, 2010     

基于条件场景的不确定性石化供应链优化方法

针对产品需求及其价格存在不确定性的石化供应链计划层最优化问题,本文建立了一种基于条件场景的石化供应链最优化方法。用多个离散场景近似随机变量概率的连续分布,根据随机变量的概率分布特征,对场景发生的概率进行参数估计,进而建立了基于场景的两阶段混合整数线性规划(MILP)模型。利用基于场景的优化结果随离散网格数增加而逐渐趋近连续的随机优化结果这一规律,给出了获得最佳离散网格数的方法,实现了计算时间成本与计算精度之间的平衡。在此基础上引入条件概率方法,利用两个随机变量间的相关性,建立了以产品价格及其需求量为不确定性的石化供应链优化方法。结果表明,与传统未考虑随机变量间相关性的一般场景划分方法相比,本文基于条件场景的随机优化方法可以更快地获得最佳场景数目,进而有效降低了计算量。     

An optimization framework for the integration of water management and shale gas supply chain design

This study presents the mathematical formulation and implementation of a comprehensive optimization framework for the assessment of shale gas resources. The framework simultaneously integrates water management and the design and planning of the shale gas supply chain, from the shale formation to final product demand centers and from fresh water supply for hydraulic fracturing to water injection and/or disposal. The framework also addresses some issues regarding wastewater quality, i.e., total dissolved solids (TDS) concentration, as well as spatial and temporal variations in gas composition, features that typically arise in exploiting shale formations. In addition, the proposed framework also considers the integration of different modeling, simulation and optimization tools that are commonly used in the energy sector to evaluate the technical and economic viability of new energy sources. Finally, the capabilities of the proposed framework are illustrated through two case studies (A and B) involving 5 well-pads operating with constant and variable gas composition, respectively. The effects of the modeling of variable TDS concentration in the produced wastewater is also addressed in case study B.     

Multi-bucket optimization for integrated planning and scheduling in the perishable dairy supply chain

This paper considers a dairy industry problem on integrated planning and scheduling of set yoghurt production. A mixed integer linear programming formulation is introduced to integrate tactical and operational decisions and a heuristic approach is proposed to decompose time buckets of the decisions. The decomposition heuristic improves computational efficiency by solving big bucket planning and small bucket scheduling problems. Further, mixed integer linear programming and constraint programming methodologies are combined with the algorithm to show their complementary strengths. Numerical studies using illustrative data with high demand granularity (i.e., a large number of small-sized customer orders) demonstrate that the proposed decomposition heuristic has consistent results minimizing the total cost (i.e., on average 8.75% gap with the best lower bound value found by MILP) and, the developed hybrid approach is capable of solving real sized instances within a reasonable amount of time (i.e., on average 92% faster than MILP in CPU time).     

Deciphering and handling uncertainty in shale gas supply chain design and optimization: Novel modeling framework and computationally efficient solution algorithm

The optimal design and operations of shale gas supply chains under uncertainty of estimated ultimate recovery (EUR) is addressed. A two‐stage stochastic mixed‐integer linear fractional programming (SMILFP) model is developed to optimize the levelized cost of energy generated from shale gas. In this model, both design and planning decisions are considered with respect to shale well drilling, shale gas production, processing, multiple end‐uses, and transportation. To reduce the model size and number of scenarios, we apply a sample average approximation method to generate scenarios based on the real‐world EUR data. In addition, a novel solution algorithm integrating the parametric approach and the L‐shaped method is proposed for solving the resulting SMILFP problem within a reasonable computational time. The proposed model and algorithm are illustrated through a case study based on the Marcellus shale play, and a deterministic model is considered for comparison. © 2015 American Institute of Chemical Engineers AIChE J, 61: 3739–3755, 2015     

Nationwide energy supply chain analysis for hybrid feedstock processes with significant CO2 emissions reduction

Integrating diverse energy sources to produce cost‐competitive fuels requires efficient resource management. An optimization framework is proposed for a nationwide energy supply chain network using hybrid coal, biomass, and natural gas to liquids (CBGTL) facilities, which are individually optimized with simultaneous heat, power, and water integration using 162 distinct combinations of feedstock types, capacities, and carbon conversion levels. The model integrates the upstream and downstream operations of the facilities, incorporating the delivery of feedstocks, fuel products, electricity supply, water, and CO₂ sequestration, with their geographical distributions. Quantitative economic trade‐offs are established between supply chain configurations that (a) replace petroleum‐based fuels by 100%, 75%, and 50% and (b) utilize the current energy infrastructures. Results suggest that cost‐competitive fuels for the US transportation sector can be produced using domestically available coal, natural gas, and sustainably harvested biomass via an optimal network of CBGTL plants with significant GHG emissions reduction from petroleum‐based processes. © 2012 American Institute of Chemical Engineers AIChE J, 2012     

A robust possibilistic programming approach for pharmaceutical supply chain network design

In this paper, a bi-objective mixed integer linear programming (BOMILP) model is developed for a pharmaceutical supply chain network design (PSCND) problem. The model helps to make several decisions about the strategic issues such as opening of pharmaceutical manufacturing centers and main/local distribution centers along with optimal material flows over a mid-term planning horizon as the tactical decisions. It aims to concurrently minimize the total costs and unfulfilled demands as the first and second objective functions. Since the critical parameters are tainted with great degree of epistemic uncertainty, a robust possibilistic programming approach is used to handle uncertain parameters. In order to verify and analyze the proposed model, it is tested on a real case study and managerial insights are provided.     

Integrated shale gas supply chain design and water management under uncertainty

The development of shale gas resources is subject to technical challenges and markedly affected by volatile markets that can undermine the development of new projects. Consequently, stakeholders can greatly benefit from decision-making support tools that integrate the complexity of the system along with the uncertainties inherent to the problem. Accordingly, a general methodology is proposed in this work for the evaluation of integrated shale gas and water supply chains under uncertainty. First, key parametric uncertainties are identified from a candidate pool via a global sensitivity analysis based on a deterministic optimization model. Then, a two-stage stochastic model is developed considering only the key uncertain parameters in the problem. Moreover, the merits of modeling uncertainty and implementing the stochastic solution approach are evaluated using the expected value of perfect information and the value of the stochastic solution metrics. Furthermore, the conditional value-at-risk approach was implemented to evaluate different risk-aversion levels and the corresponding impacts on the shale gas development plan. The proposed methodology is illustrated through two real-world case studies involving six and eight potential well-pad locations and two options of well-pad layouts. © 2018 American Institute of Chemical Engineers AIChE J, 65: 924–936, 2019     

Sustainable ammonia production through process synthesis and global optimization

Current ammonia production technologies have a significant carbon footprint. In this study, we present a process synthesis and global optimization framework to discover the efficient utilization of renewable resources in ammonia production. Competing technologies are incorporated in a process superstructure where biomass, wind, and solar routes are compared with the natural gas-based reference case. A deterministic global optimization-based branch-and-bound algorithm is used to solve the resulting large-scale nonconvex mixed-integer nonlinear programming problem (MINLP). Case studies for Texas, California, and Iowa are conducted to examine the effects of different feedstock prices and availabilities. Results indicate that profitability of ammonia production is highly sensitive to feedstock and electricity prices, as well as greenhouse gas (GHG) restrictions. Under strict 75% GHG reductions, biomass to ammonia route is found to be competitive with natural gas route, whereas wind and solar to ammonia routes require further improvement to compete with those two routes. © 2018 American Institute of Chemical Engineers AIChE J, 65: e16498 2019     

Resilience-aware design of interconnected supply chain networks with application to water-energy nexus

The effects of natural disasters, pandemic-induced lockdowns, and other disruptions often cascade across networks. In this work, we use minimum cost of resilience (MCOR) and operation-based resilience metrics to quantify network performance against single-connectivity failures and identify critical connections in interconnected networks. MCOR corresponds to the minimum additional infrastructure investment that is required to achieve a certain level of resilience. To guarantee MCOR, we incorporate the metrics in a multi-scenario mixed-integer linear program (MILP) that accounts for resilience in the design phase of interconnected networks. The goal is to obtain optimal generation and transportation capacities with flexible operation under all single-connectivity disruption scenarios. We demonstrate the applicability of our resilience-aware framework on a water-energy nexus (WEN) example focusing on grass-root design and retrofitting. We further apply the framework to analyze a regional WEN and observe that it is possible to achieve “full” resilience in the expense of additional regional investments.