Manufacturer’s mixed pallet design problem

We study a problem faced by a major beverage producer. The company produces and distributes several brands to various customers from its regional distributors. For some of these brands, most customers do not have enough demand to justify full pallet shipments. Therefore, the company decided to desig...

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Vydáno v:European journal of operational research Ročník 186; číslo 2; s. 826 - 840
Hlavní autoři: Yaman, Hande, Şen, Alper
Médium: Journal Article
Jazyk:angličtina
Vydáno: Amsterdam Elsevier B.V 16.04.2008
Elsevier
Elsevier Sequoia S.A
Edice:European Journal of Operational Research
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ISSN:0377-2217, 1872-6860
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Shrnutí:We study a problem faced by a major beverage producer. The company produces and distributes several brands to various customers from its regional distributors. For some of these brands, most customers do not have enough demand to justify full pallet shipments. Therefore, the company decided to design a number of mixed or “rainbow” pallets so that its customers can order these unpopular brands without deviating too much from what they initially need. We formally state the company’s problem as determining the contents of a pre-determined number of mixed pallets so as to minimize the total inventory holding and backlogging costs of its customers over a finite horizon. We first show that the problem is NP-hard. We then formulate the problem as a mixed integer linear program, and incorporate valid inequalities to strengthen the formulation. Finally, we use company data to conduct a computational study to investigate the efficiency of the formulation and the impact of mixed pallets on customers’ total costs.
Bibliografie:SourceType-Scholarly Journals-1
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content type line 14
ISSN:0377-2217
1872-6860
DOI:10.1016/j.ejor.2007.02.007