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THESIS SUBJECT: DECOMPOSITION FOR OPTIMIZING SUPPLY CHAIN DESIGN
PROBLEMS WITH MULTIPLE COST LEVELS
Domain: Supply chain design problem (investment decisions and underlying planning)
Initiators: David Huygens, Frederic Côte, Pieter Van Nyen
Thesis in collaboration with OM Partners NV.
Keywords: multiple cost level optimization, decomposition
1.1
Background
OM partners’ OMPPlus application can be used for designing and planning supply chain
networks over several years. Besides its interactive use, it also offers an automatic solver,
based on our MIP programming module (OMP Optimizer).
Our standard design model is twofold:
- Optimize investment decisions (opening/closing of facilities),
- Optimize the underlying planning problem (production and distribution of goods in
and between these facilities).
This allows to drive the investments by their direct impact on the supply chain. On the other
hand, this has as a consequence that large costs and small costs are mixed together in a
single MIP model. From a mathematical point of view, this can sometimes results in
numerical issues (about scaling, tolerances, sub-optimality,…)
1.2
Assignment
The purpose of this project is to investigate ways of dealing with these issues, for example,
by decomposing the two levels of optimization, and assess their impact on the solution
quality of real industrial instances.
An interesting direction may be to first optimize the costly investment decisions (considering
planning costs as zero), then optimize the underlying planning problem with the investment
decisions fixed.
We envision the following phases in this thesis:
1. Literature study:
a. Investigate if something similar has been done before
b. Get acquainted with the internals of OMP Partners design functionality and its
practical use
2. Develop one or more suitable approaches and compare them to the current
approach from a theoretical point of view.
3. Proof of concept: implement promising approaches in OMP software and test them
on a realistic dataset from industry. What improvements can be achieved?
1.3
Information on OM Partners
OM Partners is a leading software vendor of supply chain planning solutions. OM Partners is
located in Antwerp (Belgium). Its main software product is called OMP Plus and offers the
following main functionalities:
- planning (spread sheet visualization)
- scheduling (Gantt Chart visualization)
- designing (investment decisions)
-
optimizing (mathematical optimization module).