Modelling and a tabu search solution for the slab reallocation problem in the steel industry

This paper considers a slab reallocation problem arising from operations planning in the steel industry. The problem involves reallocating steel slabs to customer orders to improve the utilisation of slabs and the level of customer satisfaction. It can be viewed as an extension of a multiple knapsack problem. We firstly formulate the problem as an integer nonlinear programming (INLP) model. With variable replacement, the INLP model is then transformed into a mixed integer linear programming (MILP) model, which can be solved to optimality by MILP optimisers for very small instances. To obtain satisfactory solutions efficiently for practical-sized instances, a heuristic algorithm based on tabu search (TS) is proposed. The algorithm employs multiple neighbourhoods including swap, insertion and ejection chain in local search, and adopts solution space decomposition to speed up computation. In the ejection chain neighbourhood, a new and more effective search method is also proposed to take advantage of the structural properties of the problem. Computational experiments on real data from an advanced iron and steel company in China show that the algorithm generates very good results within a short time. Based on the model and solution approach, a decision support system has been developed and implemented in the company.