The Goods Distribution in a Warehouse Network: Optimal Solutions for Many Criteria
MAGAZINE №1 (78) February 2017
AUTHORS
KULESHOVA E.S. - Planning Manager, Syngenta LTD (Moscow, Russia)
CATEGORY Optimization and economic-mathematical modeling Distribution logistics
ABSTRACT
The paper presents the research of features to determine the best solutions for the goods distribution in the warehouse network problem on many criteria. The authors have shown that the synthesis of the following methods or approaches can be applied effectively to a network for storage of optimization decisions. They are: 1) Simulation of random orders by Monte Carlo method at a regular interval of supply planning time. 2) Analytical hierarchy process to compare the importance of particular criteria, taking into account the decision maker's preferences. 3) Linear programming in order to minimize transportation and storage costs of the goods (in the format of apriori played out random shop’s orders scenarios to be analyzed in relation to the possible adoption of alternatives, and order execution strategies). The synthesis of these methods makes it possible to formalize a set of alternatives for the organization of deliveries from the central warehouse to the distribution warehouse and shops. The task of goods distribution in the warehouse network is formalized as the problem of multicriteria selection. The implementation of this approach to the solutions optimization for the goods distribution in the warehouse network is presented in this article. As partial criteria are considered: 1) the need to reduce the average daily stock levels, pallets (so the figure would be minimized); 2) the requirement to reduce the average daily cost of storage and cargo handling, USD (thus, the rate and should be minimized); 3) the need to reduce the average daily transport expenses, USD (and this figure will be reduced).
Approach to optimize the goods distribution in the warehouse network, presented in this article, has the following characteristics. Along with the optimization procedures in the article it is presented a special modification of indicators of partial criteria, which, in contrast to the traditional theory approaches of multicriteria optimization, allows to take into account the preferences of the decision maker more adequately. This is achieved by the developed synthesis procedures to be taken into account when optimizing the efficient approaches to providing indicators such as in the form of the theory of multicriteria optimization, and in the format of the method of analytic hierarchy. The paper reveals the procedure for determining the best solution on the basis of a) traditional and generalized selection criteria (multiplication, Hurwitz, maximin); b) the method of analytic hierarchy; c) modified selection criteria. The paper also gives recommendations how to adequately take into account the preferences of decision-makers on the importance of particular criteria and also analyzes the impact of changes in their structure on the ranking of alternatives for different selection criteria.
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Distribution of Products in Warehouse Network: Synthesis of Special Optimization Procedures
MAGAZINE №4 (75) August 2016
AUTHORS
KULESHOVA E.S. - Planning Manager, Syngenta LTD (Moscow, Russia)
CATEGORY Optimization and economic-mathematical modeling Inventory management
ABSTRACT
Research of new efficient optimization decisions related to the distribution tasks of goods in the warehouse network is particularly relevant today. The purpose of this article - to help practitioners working in this field in the development of new approaches and methods for finding the best solutions in relation to problems of this type that will use existing hidden reserves of improving the efficiency of such systems. In particular, we will focus on the possibility of taking into account in the optimization of goods distribution strategies of a number of important factors, such as: 1) the ability to select the period of time for supply planning by orders of stores; 2) the ability to simulate orders from stores with the defined probability distributions for random amounts of such orders; 3) the ability to adapt to the preferences of the selection decision maker; 4) the possibility of reducing transport costs for deliveries, using solutions such as transport problems played out for random order value. The article presents such procedures, which correspond with the task of determining the best solution for the distribution of the goods in the warehouse network problem on many criteria. These procedures involve the synthesis of these optimization processes during the selected period to plan the supply of solutions. 1) Simulation modelling with random orders to stores this next period at the Monte Carlo method. 2) The use of analytic hierarchy process to compare the importance of particular criteria for decision-makers. 3) Minimization the cost of transportation and storage of goods in the form of a linear programming problem (for simulated random orders in relation to the analyzed alternatives to the possible adoption of the strategy and execution of orders). This article shows that the implementation of a set of procedures mentioned would allow formalizing the task of selecting the solution as the problem of multi-criteria optimization. After that, choose the best solutions can be carried out on the basis of traditional theory, and taking into account the adaptation of such a choice to the decision maker's preferences. Such selection procedures will be presented in a separate article.
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