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A combined terminal location and ship routing problem

Author

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  • H Gunnarsson

    (Linköping Institute of Technology)

  • M Rönnqvist

    (Linköping Institute of Technology)

  • D Carlsson

    (Södra Cell AB)

Abstract

In this paper, we consider a combined terminal location and ship routing problem at Södra Cell AB. The purpose is to supply the customers' annual demand for pulp products while minimizing the distribution costs. Customers are supplied with various pulp products from pulp mills in Scandinavia by ships, trains, or lorries. The ship routes go from the pulp mills to terminals in Europe. From each terminal, the products are transported to customers by lorry, train, or barge. Some customers can be supplied directly from the pulp mills by trains or lorries. We have developed a mathematical model to select which terminals to use and, at the same time, determine the shipping routes. The mixed integer programming model was solved directly using a commercial solver. When the number of routes generated is large, the time required to obtain an optimal solution is too long. Hence, we have developed heuristics in order to obtain an acceptable solution in reasonable time. In addition to the basic case, five different scenarios were tested. Our heuristics provide solutions that are within 0.12% of the optimal ones.

Suggested Citation

  • H Gunnarsson & M Rönnqvist & D Carlsson, 2006. "A combined terminal location and ship routing problem," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(8), pages 928-938, August.
    • Handle: RePEc:pal:jorsoc:v:57:y:2006:i:8:d:10.1057_palgrave.jors.2602057
    DOI: 10.1057/palgrave.jors.2602057
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    References listed on IDEAS

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    Cited by:

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    2. Waldemarsson, Martin & Lidestam, Helene & Karlsson, Magnus, 2017. "How energy price changes can affect production- and supply chain planning – A case study at a pulp company," Applied Energy, Elsevier, vol. 203(C), pages 333-347.
    3. Mobtaker, A. & Ouhimmou, M. & Audy, J.-F. & Rönnqvist, M., 2021. "A review on decision support systems for tactical logistics planning in the context of forest bioeconomy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 148(C).
    4. Sahar Validi & Arijit Bhattacharya & P. J. Byrne, 2020. "Sustainable distribution system design: a two-phase DoE-guided meta-heuristic solution approach for a three-echelon bi-objective AHP-integrated location-routing model," Annals of Operations Research, Springer, vol. 290(1), pages 191-222, July.
    5. Danışment Vural & Robert F. Dell & Erkan Kose, 2021. "Locating unmanned aircraft systems for multiple missions under different weather conditions," Operational Research, Springer, vol. 21(1), pages 725-744, March.
    6. de Assis, Leonardo Salsano & Camponogara, Eduardo, 2016. "A MILP model for planning the trips of dynamic positioned tankers with variable travel time," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 372-388.
    7. Osicka, Ondrej & Guajardo, Mario & van Oost, Thibault, 2018. "Cooperative game-theoretic features of cost sharing in location-routing," Discussion Papers 2018/11, Norwegian School of Economics, Department of Business and Management Science.

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