Supply Chain Modeling for a Process Industry

Supply Chain Modeling for a Process Industry

Nils-Hassan Quttineh, Helene Lidestam, Mårten Ahlstedt, Sven Olsson
DOI: 10.4018/IJORIS.2017040102
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Process industries of today differ from other industries in many aspects. The purpose of this paper is to consider these special properties of process industries when developing a mathematical model that can be used as a decision support tool for the supply chain planning for a chemical process industry in Sweden. A mixed-integer linear programming model is developed, and solutions to the model present how the products will be transported between the different sites of the company, the levels of the inventories, the setups and purchases from the external suppliers and also the production rates. The mathematical model takes many special properties regarding process industries into account. By using the results from the model and test different scenarios, the model can be used as an important support tool when making decisions. The decision support tool can for example be used in the company's budget process and thereby improve the chances of future profits increases.
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Problem Description

At the time of the study, the Perstorp group consisted of 13 production sites worldwide, but with the majority of the employees located in the EU. For an overview, see Figure 1. The company Perstorp Oxo AB was formerly named Neste Oxo, before its integration in the Perstorp group. The main focus of their production is of oxo products, that is, products based on aldehydes, alcohols, esters and acids, and they are mainly used in the water-based paint and lacquer industries.

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