Title | Optimal Replenishment and Warehouse Transshipment Model for Multiple Public Hazardous Materials~ A Case Study of E Chemical Company |
Year | 2019 |
Degree | Master |
School | Department of Transportation and Logistics Management College of Management National Chiao Tung University |
Author | Guo-Lung Luo |
Summary | Excellent replenishment and inventory management can significantly reduce the cost, increase the service quality, and improve efficiency and competitiveness of a company. The replenishment and inventory control of hazardous materials is usually more complicated since the decision maker has to take accounts of avoiding danger or violations of laws. Therefore, a company may take more efforts to secure safety and control cost when needing hazardous materials for its operations. The Ministry of the Interior of Taiwan revised “the public hazardous substances and flammable pressurized gases establishment standards and safety control regulations” and included public hazardous materials into the regulations starting from May 2, 2016. The E chemical company not only maintains the owned warehouse, but also starts using a rented warehouse to meet the demand and avoid exceeding the storage cap for hazardous materials from the revision of regulations. Therefore, the decision-making scenario is to determine the optimal domestic/abroad replenishment and transshipment decisions between two warehouses for a variety of hazardous materials in the same category for a single factory using an owned warehouse and a rented one without violating the storage cap. We formulate the corresponding mathematical model for the above scenario and propose a search algorithm based on Simulated Annealing (SA) to determine the optimal replenishment time/quantities and optimal transshipment time/quantities from the rented warehouse to the owned one to meet the demand and to minimize the total costs. We demonstrate that the optimal solutions from the proposed mathematical model and the close-to-optimal solutions from the SA algorithm outperform the company"s current decisions with significant cost savings using the real-world data from the E chemical company. |
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