A Branch-Price-and-Cut Algorithm for SingleProduct Maritime Inventory Routing

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1. IntroduБайду номын сангаасtion
Inventory routing (IR) involves using a set of vehicles to distribute a product from supply facilities to demand facilities over a given planning horizon. The objective is to minimize the costs or to maximize the profit related to distributing the product without depleting the inventory or exceeding the storage capacity at the facilities. The resulting inventory-routing problem (IRP) is at the heart of many supply chain problems, including all examples of vendor-managed resupply (VMR); see Campbell et al. (1998) for an in-depth discussion of VMR and its applications. Although maritime transportation is not typically associated with VMR, it features prominently in the supply chain of bulk products such as grain, coal, iron ore, steel, fertilizers, and various petrochemicals. A particularly interesting inventory-routing environment with maritime transportation is encountered in the petroleum industry, where huge capital investments and large operational costs
OPERATIONS RESEARCH
Vol. 60, No. 1, January–February 2012, pp. 106–122 ISSN 0030-364X (print) ISSN 1526-5463 (online) /10.1287/opre.1110.0997 © 2012 INFORMS
Jin-Hwa Song
ExxonMobil Research and Engineering Company, Annandale, New Jersey 08801, jinhwa.song@
A branch-price-and-cut algorithm is developed for a complex maritime inventory-routing problem with varying storage capacities and production/consumption rates at facilities. The resulting mixed-integer pricing problem is solved exactly and efficiently using a dynamic program that exploits certain “extremal” characteristics of the pricing problem. The formulation is tightened by using the problem’s boundary conditions in preprocessing and to restrict the set of columns that are produced by the pricing problem. Branching schemes and cuts are introduced that can be implemented efficiently and that preserve the structure of the pricing problem. Some of the cuts are inspired by the capacity cuts known for the vehicle-routing problem, whereas others specifically target fractional solutions brought about by individual vessels “competing” for limited inventory at load ports and limited storage capacity at discharge ports. The branch-price-and-cut approach solves practically sized problems motivated by the operations of an oil company to optimality, and it provides reasonable bounds for larger instances. Subject classifications : maritime inventory routing; integer programming; column generation; dynamic programming. Area of review : Transportation. History : Received January 2010; revisions received August 2010, December 2010; accepted April 2011.
Martin W. P. Savelsbergh
School of Mathematical and Physical Sciences, University of Newcastle, Callaghan, New South Wales 2308, Australia, martin.savelsbergh@.au
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are required to keep the supply chain moving, and where the volume and value of product passing through the supply chain is mindboggling. In 2005, 2.4 billion tons (17.6 billion barrels) of petroleum was shipped by maritime transportation (Rodrigue et al. 2006). This accounts for approximately 62% of all petroleum produced during that year and approximately $182 billion in trade value of crude oil imported to the United States (United States Energy Information Administration 2007). The focus of this paper is solving an inventory-routing problem motivated by the challenges in maritime transportation. The motivating business problem is detailed in Furman et al. (2011). Although developed with maritime transportation in mind, the developments in this paper address a more general IRP. The problem considered is quite complex because it involves, among others, multiple supply and demand facilities, production and consumption rates that vary over time, storage capacities that vary over
Kevin C. Furman
ExxonMobil Research and Engineering Company, Annandale, New Jersey 08801, kevin.c.furman@
George L. Nemhauser
H. Milton Stewart School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, Georgia 30332, gnemhaus@
A Branch-Price-and-Cut Algorithm for SingleProduct Maritime Inventory Routing
Faramroze G. Engineer
School of Mathematical and Physical Sciences, University of Newcastle, Callaghan, New South Wales 2308, Australia, faramroze.engineer@.au
Engineer et al.: Branch-Price-and-Cut for Maritime Inventory Routing