IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v145y2013i1p18-28.html
   My bibliography  Save this article

Optimising safety stock placement and lead time in an assembly supply chain using bi-objective MAX–MIN ant system

Author

Listed:
  • Moncayo-Martínez, Luis A.
  • Zhang, David Z.

Abstract

The problem of placing safety inventory over a network, which assembles a product, is a challenging issue in supply chain design (SCD) because manufacturers always want to reduce inventory all over the supply chain (SC). Moreover, the process of designing a SC and then placing inventory, to offer high service level at the lowest possible cost, across a complex SC, is not an easy task for decision makers. In this paper we use the SC representation proposed by Graves and Willems (2000), Manufacturing & Service Operations Management 2 (1), 68–83, where a SC is divided into many supplying, manufacturing, and delivering stages. Our problem is to select one resource option to perform each stage, and based on the selected options to place an amount of inventory (in-progress and on-hand) at each stage, in order to offer a satisfactory customer service level with as low as possible total supply chain cost. A resource option here represents a supplier, a manufacturing plant (production line), or a transport mode in a supplying, manufacturing, or delivering stage, respectively. We developed an approach based on ant colony optimisation (ACO) to minimise simultaneously the total supply chain cost and the products’ lead time to ensure product deliveries without delays. What are new in our approach are the bi-objective function and the computational efficiency of our ACO-based approach. In addition, ACO has not been applied to solve the inventory placement problem. As a validation of the model, we: (a) describe a successful application at CIFUNSA, one of the largest iron foundry in the world, and (b) compare different CPU time instances and metrics about multi-objective optimisation.

Suggested Citation

  • Moncayo-Martínez, Luis A. & Zhang, David Z., 2013. "Optimising safety stock placement and lead time in an assembly supply chain using bi-objective MAX–MIN ant system," International Journal of Production Economics, Elsevier, vol. 145(1), pages 18-28.
    • Handle: RePEc:eee:proeco:v:145:y:2013:i:1:p:18-28
    DOI: 10.1016/j.ijpe.2012.12.024
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527313000029
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2012.12.024?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sean P. Willems, 2008. "Data Set--Real-World Multiechelon Supply Chains Used for Inventory Optimization," Manufacturing & Service Operations Management, INFORMS, vol. 10(1), pages 19-23, February.
    2. Moncayo-Martínez, Luis A. & Zhang, David Z., 2011. "Multi-objective ant colony optimisation: A meta-heuristic approach to supply chain design," International Journal of Production Economics, Elsevier, vol. 131(1), pages 407-420, May.
    3. Stephen C. Graves & Sean P. Willems, 2000. "Optimizing Strategic Safety Stock Placement in Supply Chains," Manufacturing & Service Operations Management, INFORMS, vol. 2(1), pages 68-83, June.
    4. Stephen C. Graves & Sean P. Willems, 2005. "Optimizing the Supply Chain Configuration for New Products," Management Science, INFORMS, vol. 51(8), pages 1165-1180, August.
    5. Melo, M.T. & Nickel, S. & Saldanha-da-Gama, F., 2009. "Facility location and supply chain management - A review," European Journal of Operational Research, Elsevier, vol. 196(2), pages 401-412, July.
    6. Doerner, K.F. & Gutjahr, W.J. & Hartl, R.F. & Strauss, C. & Stummer, C., 2006. "Pareto ant colony optimization with ILP preprocessing in multiobjective project portfolio selection," European Journal of Operational Research, Elsevier, vol. 171(3), pages 830-841, June.
    7. Amini, Mehdi & Li, Haitao, 2011. "Supply chain configuration for diffusion of new products: An integrated optimization approach," Omega, Elsevier, vol. 39(3), pages 313-322, June.
    8. Salal Humair & Sean P. Willems, 2006. "Optimizing Strategic Safety Stock Placement in Supply Chains with Clusters of Commonality," Operations Research, INFORMS, vol. 54(4), pages 725-742, August.
    9. Gravel, Marc & Price, Wilson L. & Gagne, Caroline, 2002. "Scheduling continuous casting of aluminum using a multiple objective ant colony optimization metaheuristic," European Journal of Operational Research, Elsevier, vol. 143(1), pages 218-229, November.
    10. Doerner, K.F. & Gutjahr, W.J. & Hartl, R.F. & Strauss, C. & Stummer, C., 2008. "Nature-inspired metaheuristics for multiobjective activity crashing," Omega, Elsevier, vol. 36(6), pages 1019-1037, December.
    11. Hau L. Lee & Corey Billington, 1993. "Material Management in Decentralized Supply Chains," Operations Research, INFORMS, vol. 41(5), pages 835-847, October.
    12. Chopra, Sunil, 2003. "Designing the distribution network in a supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 39(2), pages 123-140, March.
    13. Youssef Boulaksil & Jan C. Fransoo & Ernico N. G. van Halm, 2009. "Setting safety stocks in multi-stage inventory systems under rolling horizon mathematical programming models," Springer Books, in: Herbert Meyr & Hans-Otto Günther (ed.), Supply Chain Planning, pages 199-218, Springer.
    14. Spitter, J. M. & Hurkens, C. A. J. & de Kok, A. G. & Lenstra, J. K. & Negenman, E. G., 2005. "Linear programming models with planned lead times for supply chain operations planning," European Journal of Operational Research, Elsevier, vol. 163(3), pages 706-720, June.
    15. Wang, Juite & Shu, Yun-Feng, 2007. "A possibilistic decision model for new product supply chain design," European Journal of Operational Research, Elsevier, vol. 177(2), pages 1044-1061, March.
    16. Persona, Alessandro & Battini, Daria & Manzini, Riccardo & Pareschi, Arrigo, 2007. "Optimal safety stock levels of subassemblies and manufacturing components," International Journal of Production Economics, Elsevier, vol. 110(1-2), pages 147-159, October.
    17. Osman, Hany & Demirli, Kudret, 2012. "Integrated safety stock optimization for multiple sourced stockpoints facing variable demand and lead time," International Journal of Production Economics, Elsevier, vol. 135(1), pages 299-307.
    18. Terry P. Harrison, 2001. "Global Supply Chain Design," Information Systems Frontiers, Springer, vol. 3(4), pages 413-416, December.
    19. Paul Glasserman & Sridhar Tayur, 1995. "Sensitivity Analysis for Base-Stock Levels in Multiechelon Production-Inventory Systems," Management Science, INFORMS, vol. 41(2), pages 263-281, February.
    20. Karl Doerner & Walter Gutjahr & Richard Hartl & Christine Strauss & Christian Stummer, 2004. "Pareto Ant Colony Optimization: A Metaheuristic Approach to Multiobjective Portfolio Selection," Annals of Operations Research, Springer, vol. 131(1), pages 79-99, October.
    21. Gunasekaran, Angappa & Lai, Kee-hung & Edwin Cheng, T.C., 2008. "Responsive supply chain: A competitive strategy in a networked economy," Omega, Elsevier, vol. 36(4), pages 549-564, August.
    22. Markus Ettl & Gerald E. Feigin & Grace Y. Lin & David D. Yao, 2000. "A Supply Network Model with Base-Stock Control and Service Requirements," Operations Research, INFORMS, vol. 48(2), pages 216-232, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Barros, Júlio & Cortez, Paulo & Carvalho, M. Sameiro, 2021. "A systematic literature review about dimensioning safety stock under uncertainties and risks in the procurement process," Operations Research Perspectives, Elsevier, vol. 8(C).
    2. Jörn Grahl & Stefan Minner & Daniel Dittmar, 2016. "Meta-heuristics for placing strategic safety stock in multi-echelon inventory with differentiated service times," Annals of Operations Research, Springer, vol. 242(2), pages 489-504, July.
    3. S. M. Shahidul Islam & Mohammad Abdul Hoque, 2017. "A joint economic lot size model for a supplier-manufacturer-retailers supply chain of an agricultural product," OPSEARCH, Springer;Operational Research Society of India, vol. 54(4), pages 868-885, December.
    4. Zied Bahroun & Nidhal Belgacem, 2019. "Determination of dynamic safety stocks for cyclic production schedules," Operations Management Research, Springer, vol. 12(1), pages 62-93, June.
    5. Schuster Puga, Matías & Minner, Stefan & Tancrez, Jean-Sébastien, 2019. "Two-stage supply chain design with safety stock placement decisions," International Journal of Production Economics, Elsevier, vol. 209(C), pages 183-193.
    6. Abdelsalam, Hisham M. & Elassal, Magy M., 2014. "Joint economic lot sizing problem for a three—Layer supply chain with stochastic demand," International Journal of Production Economics, Elsevier, vol. 155(C), pages 272-283.
    7. Eruguz, Ayse Sena & Sahin, Evren & Jemai, Zied & Dallery, Yves, 2016. "A comprehensive survey of guaranteed-service models for multi-echelon inventory optimization," International Journal of Production Economics, Elsevier, vol. 172(C), pages 110-125.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eruguz, Ayse Sena & Sahin, Evren & Jemai, Zied & Dallery, Yves, 2016. "A comprehensive survey of guaranteed-service models for multi-echelon inventory optimization," International Journal of Production Economics, Elsevier, vol. 172(C), pages 110-125.
    2. de Kok, Ton & Grob, Christopher & Laumanns, Marco & Minner, Stefan & Rambau, Jörg & Schade, Konrad, 2018. "A typology and literature review on stochastic multi-echelon inventory models," European Journal of Operational Research, Elsevier, vol. 269(3), pages 955-983.
    3. Barros, Júlio & Cortez, Paulo & Carvalho, M. Sameiro, 2021. "A systematic literature review about dimensioning safety stock under uncertainties and risks in the procurement process," Operations Research Perspectives, Elsevier, vol. 8(C).
    4. Moncayo-Martínez, Luis A. & Zhang, David Z., 2011. "Multi-objective ant colony optimisation: A meta-heuristic approach to supply chain design," International Journal of Production Economics, Elsevier, vol. 131(1), pages 407-420, May.
    5. David Simchi-Levi & Yao Zhao, 2005. "Safety Stock Positioning in Supply Chains with Stochastic Lead Times," Manufacturing & Service Operations Management, INFORMS, vol. 7(4), pages 295-318, December.
    6. Osman, Hany & Demirli, Kudret, 2012. "Integrated safety stock optimization for multiple sourced stockpoints facing variable demand and lead time," International Journal of Production Economics, Elsevier, vol. 135(1), pages 299-307.
    7. Kaminsky, Philip & Kaya, Onur, 2008. "Inventory positioning, scheduling and lead-time quotation in supply chains," International Journal of Production Economics, Elsevier, vol. 114(1), pages 276-293, July.
    8. Aouam, Tarik & Kumar, Kunal, 2019. "On the effect of overtime and subcontracting on supply chain safety stocks," Omega, Elsevier, vol. 89(C), pages 1-20.
    9. Salal Humair & Sean P. Willems, 2006. "Optimizing Strategic Safety Stock Placement in Supply Chains with Clusters of Commonality," Operations Research, INFORMS, vol. 54(4), pages 725-742, August.
    10. Stephen C. Graves & Tor Schoenmeyr, 2016. "Strategic Safety-Stock Placement in Supply Chains with Capacity Constraints," Manufacturing & Service Operations Management, INFORMS, vol. 18(3), pages 445-460, July.
    11. Kevin H. Shang & Jing-Sheng Song, 2006. "A Closed-Form Approximation for Serial Inventory Systems and Its Application to System Design," Manufacturing & Service Operations Management, INFORMS, vol. 8(4), pages 394-406, September.
    12. Olivares-Benitez, Elias & Ríos-Mercado, Roger Z. & González-Velarde, José Luis, 2013. "A metaheuristic algorithm to solve the selection of transportation channels in supply chain design," International Journal of Production Economics, Elsevier, vol. 145(1), pages 161-172.
    13. Schuster Puga, Matías & Minner, Stefan & Tancrez, Jean-Sébastien, 2019. "Two-stage supply chain design with safety stock placement decisions," International Journal of Production Economics, Elsevier, vol. 209(C), pages 183-193.
    14. Mohammad Asghari & Seyed Mohammad Javad Mirzapour Al-E-Hashem & Yacine Rekik, 2022. "Environmental and social implications of incorporating carpooling service on a customized bus system," Post-Print hal-03598768, HAL.
    15. Negahban, Ashkan & Dehghanimohammadabadi, Mohammad, 2018. "Optimizing the supply chain configuration and production-sales policies for new products over multiple planning horizons," International Journal of Production Economics, Elsevier, vol. 196(C), pages 150-162.
    16. Brandenburg, Marcus, 2017. "A hybrid approach to configure eco-efficient supply chains under consideration of performance and risk aspects," Omega, Elsevier, vol. 70(C), pages 58-76.
    17. Shih-Pin Chen, 2017. "Effects of fuzzy data on decision making in a competitive supply chain," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(10), pages 1146-1160, October.
    18. Vahid Nooraie, S. & Parast, Mahour Mellat, 2016. "Mitigating supply chain disruptions through the assessment of trade-offs among risks, costs and investments in capabilities," International Journal of Production Economics, Elsevier, vol. 171(P1), pages 8-21.
    19. Stephen C. Graves & Sean P. Willems, 2000. "Optimizing Strategic Safety Stock Placement in Supply Chains," Manufacturing & Service Operations Management, INFORMS, vol. 2(1), pages 68-83, June.
    20. John J. Neale & Sean P. Willems, 2009. "Managing Inventory in Supply Chains with Nonstationary Demand," Interfaces, INFORMS, vol. 39(5), pages 388-399, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:145:y:2013:i:1:p:18-28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.