Transportation lot sizing in the cement industry

Abstract

In this thesis a mathematical formulation of a new transportation lot sizing model is presented. The model is developed in three separate steps, starting with the development of a single level capacitated multi-terminal lot sizing model. This step constitutes our initial model and is referred to as Model 0. In the next step we have added the extension of period overlapping setup to our initial model. This step proved to be the most difficult to formulate in the model. The final step that concludes our final model is the implementation of the possibility for inventory shortage. Solutions to the three steps are found by the optimization tool used to solve the model – MPL with the Gurobi solver. Each step is presented separately in chapter four with a discussion of the solution together with a discussion of the challenges concerning each step. Based on the discussion and observations made in chapter four; the stability, flexibility and functionality of the model are tested in chapter five. The tests are performed in different scenarios by changing different parameters in the model, and also by testing how the model reacts to different demand patterns. The utility value of the two extensions made in the model becomes more evident in these tests, and we also discuss the solutions and findings from each scenario.