Satisfying the demand at the shop level while having a smooth production at the plant level are usually conflicting objectives in a supply chain. On the one hand, the production variations will be high if the shops can order upstream – anytime – exactly what they need. On the other hand, producing the same amount each day generates shortages downstream (e.g., in the shops). Seven objective functions are considered to represent the different goals of various stakeholders along the supply chain (from the shop to the plant). This study, performed in collaboration with a major fast-moving consumer goods company, proposes a lexicographic model for managing the supply chain in an integrated manner. Because of the lexicography, we can only improve a lower-level objective if it does not deteriorate higher-level objectives. A local search is designed and combined with a well-known commercial solver. The local search has the particularity of employing various types of neighborhood structures in order to capture each objective funtion at the appropriate step of the search process. As computation time is limited to 10 minutes, a time management approach is proposed, which aims at efficiently assigning more computation time to higher-level objective functions. Experiments are performed on instances generated with the company. The benefit of the proposed approach is highlighted with respect to current practice.
Nicolas Zufferey is a full professor of operations management at the University of Geneva in Switzerland, since 2008. His research activity focuses on designing solution methods for difficult and large optimization problems, with applications mainly in transportation, scheduling, production, inventory management, network design, supply chain management and telecommunications. He is member of the CIRRELT transportation and logistics research center and of the GERAD decision-analysis research center. He received his BSc and MSc degrees in Mathematics at EPFL (Swiss Federal Institute of Technology at Lausanne), as well as his PhD degree in operations research (2002). He was then successively a post-doctoral trainee at the University of Calgary (2003 – 2004) and an assistant professor at Laval University (2004 – 2007). He is the (co)author of more than 120 publications (papers in professional journals, proceedings of conferences, and book chapters) and has reviewed papers for 49 international journals. With 66 coauthors, he has had research activities with 26 Universities in Europe and America, as well as with 24 private companies.