Hewlett-Packard Hewlett Robust supply chain design based on advanced inventory optimization techniques. Realized savings of over $130 million in 2004
Source: Interfaces
Mathematics in Operation
Real Practical Problem Mathematical (Optimization) Problem Mathematical Solution Method (Algorithm) Computer Algorithm Decision Support Software System Human Decision-Maker
x2
Decision Support
Interface Decision Support Tool
Information Systems
A Team Effort
Users
Staff Rostering
Allocating Staff to Work Shifts A significant role for the Team
other information
CONSTRAINTS:
Skill Demand
The daily skill demand is met.
Equitability (breaks,salaries)
Each staff member must at least work 2 days/week and can at most work 4 days/week. days/week.
Workplace Regulation
On any day, there must be at least 4 staff members working.
OBJECTIVE:
Minimise Total Employment Cost/Week
Minimise
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i ik
s.t.
a x
i !1 k !1
10
u d jk ,
2 e xik e 4, i E
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x
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MP Xpress Large-scale optimisation software developed Largeby Dash (http://www.dashoptimization.com) (http://www.dashoptimization.com) Xpress-IVE (Interactive Visual Environment) Xpress-
Information system installed to disseminate information (shift preference, roster etc.) effectively throughout the organisation
Fatigue
limit to number of working hours per day/week/fortnight (Union Requirements)
Equitable roster
equitable weekend/night shifts
Motivation
skill utilisation (avoid monotonous job routine)
Training
training and development (scheduled)
MORe is currently involved in several (long-term) staff (longrostering projects for Australia-based companies in Australiaat least one of the industries mentioned above.
Force Optimisation
A collaborative project between Melbourne Operations Research (MORe) & Defence Science and Technology Organisation (DSTO), Department of Defence, Australian Government
Project Background
DSTO LOD working with Melbourne Operations Research (MORe), The University of Melbourne Project aim: support the Army (Force Design Group) with their capability options development and analysis, seeking
What types of forces should be maintained? What force strength is required?
to ensure forces are effective in achieving defence objectives Project started in mid-2004 and successfully completed its midmodelling, interface design and testing phases in the beginning of year 2005 The model will be presented at the Australian Society for Operations Research 2005 Conference (26-28th September) (26-
e e e e e e
max effectiveness
Objectives
With OR techniques, solutions for the facility location problem can be obtained fast, and hence, we are able to perform a large range of what-if scenarios. what-
Problem Statement
36km Customer 10 000 W-3 180 000 36km W-4 Warehouse (W)
C
180 000
D
220 000
Assume: Transportation cost: $20/km/unit Warehouses have the same O/H cost Warehouse has very large capacity Problem modelled as an integer linear program, and solved using XpressMP.
B
10 000 units W-2
W-5
A
W-1 W-6
F
10 000
Minimise s .t .
d
f x W
i 1 i 1 j 1
yij
y
j 1 n
ij
e Ci xi , i 1- n u Dj ,
y
i 1
ij
j 1- d
yij
i
xi
Scenario 1
Scenario 1: Warehouse O/H cost is very small as compared to transportation cost
10 000 W-3 180 000
C
180 000
W-4
D
220 000
Warehouse O/H: B $6 000 000 Transportation cost: 10 000 units $20/km/unit A proximity dominates operate the W-1 warehouse closest to each customer
W-5 W-2
F
W-6 10 000
Scenario 2
Scenario 2: Warehouse O/H cost is very large as compared to transportation cost
10 000 W-3 180 000
W-4
D
220 000
Warehouse O/H: 180 000 $1 800 000 000 Transportation cost: B $20/km/unit too expensive to 10 000 units operate a warehouse hence, the most A centralised warehouse selected (based on W-1 demand & distance)
W-5 W-2
F
W-6 10 000
Scenario 3
Scenario 3: Both warehouse O/H and transportation costs are competing
10 000 W-3 180 000
C
180 000
W-4
D
220 000
Warehouse O/H: $60 000 000 B Transportation cost: 10 000 units $20/km/unit solution is not A obvious; too many possibilities
W-1
W-5 W-2
F
W-6 10 000
Scenario 4
Scenario 4: Both warehouse O/H and transportation costs are competing AND warehouse capacity limited
10 000 W-3 180 000
C
180 000
10 000 110 000
150 000
W-4
D
220 000
30 000
Warehouse O/H: W-2 10 000 units $60 000 000 70 000 Transportation cost: A $20/km/unit 10 000 Warehouse W-1 capacity: 150 000 units
150 000
W-5
70 000 10 000
W-6 10 000
Facility Location
Possible variants
closure decisions acquisition decisions
Possible extensions
limitations to the number of distribution centres warehouse-customer distance constraint warehouse complex cost functions uncertain demand
Other OR Applications
Other areas where OR techniques have been proven to be useful include
Inventory control Warehouse design, storage and retrieval, order picking Vehicle routing Delivery transport mode selection Capacity and manpower planning Production scheduling