Skip to main content
Log in

Reoptimization framework and policy analysis for maritime inventory routing under uncertainty

  • Published:
Optimization and Engineering Aims and scope Submit manuscript

Abstract

We study a maritime inventory routing problem, in which shipments between production and consumption nodes are carried out by a fleet of vessels. The vessels have specific capacities and can be chartered under different agreements. The inventory levels of all consumption nodes and some production nodes should be maintained within specified bounds; for the remaining production nodes, orders should be picked up within pre-defined time windows. We propose a discrete-time mixed-integer programming model. In the face of new information and uncertainty, this optimization model has to be re-solved, as the horizon is rolled forward. We discuss how to account for different sources of uncertainty. We present a rolling-horizon reoptimization framework that allows us to study different policies that impact the quality of the implemented solution, so we can identify the optimal set of policies.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7
Fig. 8
Fig. 9
Fig. 10
Fig. 11
Fig. 12
Fig. 13
Fig. 14
Fig. 15

Similar content being viewed by others

Abbreviations

dD :

Dates (absolute time)

iI :

Time-chartered vessels

jJ :

Nodes in the SC network, including vessel center (vc)

(j, j′)∈A \(\subseteq {\mathbf{J}} \times {\mathbf{J}}\) :

Arcs (trips) in the SC network

\(k \in {\mathbf{K}}_{j}\) :

Orders of third-party production node j

lL :

Node clusters

mM :

Products

nN :

Number of unreserved vessels/trips

tT :

Time points or periods

\({\mathbf{A}}_{l}\) :

Arcs (trips) that are within cluster l

\({\mathbf{A}}_{t}^{R}\) :

Arcs (trips) already reserved to be served using voyage charters at time point t

\({\mathbf{I}}^{R}\) :

Time charters located at the vessel center but reserved

\({\mathbf{J}}^{P} /{\mathbf{J}}^{C}\) :

Production/consumption nodes

\({\mathbf{J}}^{TP} /{\mathbf{J}}^{OP}\) :

Third-party/owned production nodes

\(W_{{ijj^{'} t}}^{L}\) :

=1 if time-chartered vessel \(i\) starts a trip from j to j′ at time point t

\(W_{{jj^{'} t}}^{S}\) :

=1 if a voyage-chartered vessel starts a trip from j to j′ at time point t

\(\bar{X}_{ijt}^{L}\) :

=1 if time charter i is at node j during time period t

\(\bar{Y}_{it}^{L}\) :

=1 if vessel i is chartered in period t beyond \(\vartheta^{L}\) periods

\(C^{ALL} /C_{t}^{OF} /C_{t}^{UF}\) :

Total/overflow/underflow cost

\(C_{t}^{MH} /C_{t}^{FT} /C_{t}^{VT}\) :

Material holding/fixed transportation/variable transportation cost

\(C_{t}^{FL} /C_{t}^{EL} /C_{t}^{S}\) :

Fixed time-charter/extended time-charter/voyage-charter cost

\(C_{t}^{EP}\) :

Penalty term for modeling early pick-up preference

\(F_{{ijj^{'} mt}}^{L}\) :

Product m in time-chartered vessel i traveling from j to j′ starting at time point t

\(F_{{jj^{'} mt}}^{S}\) :

Product m in the voyage-chartered vessel from j to j′ starting at time point t

\(L_{jmt}\) :

Inventory level of product m at node j at time point t

\(L_{jmt}^{OF} /L_{jmt}^{UF}\) :

Overflow/underflow amount of product m of node j at time point t

\(\alpha\) :

Confidence level

\(\beta\) :

Penalty constant for modeling early pick-up preference

\(\gamma_{i}^{MAX} /\gamma^{MAX}\) :

Capacity of time-chartered vessel i/voyage-chartered vessels

\(\gamma_{i}^{MIN} /\gamma^{MIN}\) :

Minimum load on time charter i/voyage charter when traveling from a production node to a consumption node

\(\delta\) :

Time period length

\(\delta^{LE}\) :

Earliest time a time charter becomes available

\(\delta_{n}^{L} /\delta_{ln}^{S}\) :

Time when the nth time/voyage charter becomes available

\(\varepsilon_{L}\) :

Probability of time charter availability

\(\zeta_{jmt}^{MAX} /\zeta_{jmt}^{MIN}\) :

Maximum/minimum level of product m at node j at time point t

\(\eta\) :

Planning horizon

\(\theta_{jkt}\) :

=1 if period t is in pick-up window k of third-party production node j

\(\vartheta^{L}\) :

Minimum duration of time charter rental

\(\lambda^{LA} /\lambda^{LB} /\lambda^{LR}\) :

Earliest reservation/latest reservation/returning notice time for time charters

\(\lambda^{SA} /\lambda^{SB}\) :

Earliest/latest reservation time for voyage charters

\(\lambda^{PU}\) :

Time when a pick-up window becomes deterministically known

\(\xi_{{ijj^{'} }}^{MAX} /\xi_{{jj^{'} }}^{MAX}\) :

Maximum allowable load for trip (j,j′) using time charter i/voyage charter

\(\pi_{jm}^{MH} /\pi_{jmt}^{OF} /\pi_{jmt}^{UF}\) :

Material holding/overflow/underflow cost

\(\pi_{{jj^{'} }}^{FT} /\pi_{{jj^{'} }}^{VT}\) :

Fixed/variable transportation cost for trip (j,j′)

\(\pi_{i}^{FL} /\pi_{i}^{EL}\) :

Standard/extension cost for time charters

\(\pi_{jt}^{EP}\) :

Penalty used to model early pick-up preference

\(\pi_{{jj^{'} }}^{S}\) :

Voyage charter cost for trip (j,j′)

\(\rho_{jmt}\) :

Production (positive) or consumption (negative) rate of node j during period t

\(\sigma_{jk}^{OS} /\sigma_{jk}^{OE}\) :

Start/end time of the pick-up window of order k from third-party production node j

\(\sigma^{SW}\) :

Soft window length

\(\tau_{{jj^{'} }}\) :

Traversal time along arc (j,j′)

\(\varphi_{jmk}\) :

Amount of product m in order k from third-party production node j

\(\chi_{it}\) :

=1 if period t is within the first \(\vartheta^{L}\) periods of the current time charter of vessel i

\(C^{ID} \left( d \right)\) :

Estimated cost at date d

\(\hat{F}_{ijmt}^{L}\) :

Amount of product m in vessel i en route to node j, expected to arrive at time point t

\(\hat{F}_{{j^{'} jmt}}^{S}\) :

Amount of product m that is en route and will arrive at node j at time point t from production node j′ from the voyage charter

\(\hat{W}_{{ijj^{'} t}}^{L}\) :

=1 if vessel i is scheduled to depart j towards j′ at time point t

\(\hat{W}_{{jj^{'} t}}^{S}\) :

=1 if a voyage charter is scheduled to depart j for j′ at time point t

\(\hat{X}_{ijt}^{L}\) :

=1 if vessel i is at node j initially (t = 0), or it is en route and will arrive at j at time point t (t > 0)

References

  • Agra A, Andersson H, Christiansen M, Wolsey L (2013) A maritime inventory routing problem: discrete time formulations and valid inequalities. Networks 62(4):297–314

    Article  MathSciNet  Google Scholar 

  • Agra A, Christiansen M, Delgado A, Hvattum LM (2015) A maritime inventory routing problem with stochastic sailing and port times. Comput Oper Res 61:18–30

    Article  MathSciNet  Google Scholar 

  • Agra A, Christiansen M, Delgado A (2017) Discrete time and continuous time formulations for a short sea inventory routing problem. Optim Eng 18(1):269–297

    Article  MathSciNet  Google Scholar 

  • Al-Ameri TA, Shah N, Papageorgiou LG (2008) Optimization of vendor-managed inventory systems in a rolling horizon framework. Comput Ind Eng 54(4):1019–1047

    Article  Google Scholar 

  • Andersson H, Hoff A, Christiansen M, Hasle G, Løkketangen A (2010) Industrial aspects and literature survey: combined inventory management and routing. Comput Oper Res 37(9):1515–1536

    Article  MathSciNet  Google Scholar 

  • Balasubramanian J, Grossmann IE (2004) Approximation to multistage stochastic optimization in multiperiod batch plant scheduling under demand uncertainty. Ind Eng Chem Res 43(14):3695–3713

    Article  Google Scholar 

  • Bassett MH, Pekny JF, Reklaitis GV (1997) Using detailed scheduling to obtain realistic operating policies for a batch processing facility. Ind Eng Chem Res 36(5):1717–1726

    Article  Google Scholar 

  • Braun MW, Rivera DE, Flores ME, Carlyle WM, Kempf KG (2003) A model predictive control framework for robust management of multi-product, multi-echelon demand networks. Annu Rev Control 27(2):229–245

    Article  Google Scholar 

  • Campbell AM, Savelsbergh MWP (2004) A decomposition approach for the inventory-routing problem. Transp Sci 38(4):488–502

    Article  Google Scholar 

  • Christiansen M, Fagerholt K (2002) Robust ship scheduling with multiple time windows. Naval Res Logist (NRL) 49(6):611–625

    Article  MathSciNet  Google Scholar 

  • Christiansen M, Nygreen B (2005) Robust inventory ship routing by column generation. In: Desaulniers G, Desrosiers J, Solomon MM (eds) Column generation, Springer, Boston, MA, pp 197–224. https://doi.org/10.1007/0-387-25486-2_7

    Chapter  MATH  Google Scholar 

  • Coelho LC, Cordeau JF, Laporte G (2012) Consistency in multi-vehicle inventory-routing. Transp Res C-EMER 24:270–287

    Article  Google Scholar 

  • Coelho LC, Cordeau JF, Laporte G (2014) Thirty years of inventory-routing. Transp Sci 48(1):1–19

    Article  Google Scholar 

  • Cui J, Engell S (2010) Medium-term planning of a multiproduct batch plant under evolving multi-period multi-uncertainty by means of a moving horizon strategy. Comput Chem Eng 34(5):598–619

    Article  Google Scholar 

  • Dong Y, Pinto JM, Sundaramoorthy A, Maravelias CT (2014) MIP model for inventory routing in industrial gases supply chain. Ind Eng Chem Res 53(44):17214–17225

    Article  Google Scholar 

  • Dong Y, Maravelias CT, Pinto JM, Sundaramoorthy A (2017) Solution methods for vehicle-based inventory routing problems. Comput Chem Eng 101:259–278

    Article  Google Scholar 

  • Engineer FG, Furman KC, Nemhauser GL, Savelsbergh MWP, Song J-H (2012) A branch-price-and-cut algorithm for single-product maritime inventory routing. Oper Res 60(1):106–122

    Article  MathSciNet  Google Scholar 

  • Fischer A, Nokhart H, Olsen H, Fagerholt K, Rakke JG, Stålhane M (2016) Robust planning and disruption management in roll-on roll-off liner shipping. Transp Res E-LOG 91:51–67

    Article  Google Scholar 

  • Gaur V, Fisher ML (2004) A periodic inventory routing problem at a supermarket chain. Oper Res 52(6):813–822

    Article  Google Scholar 

  • Goel V, Furman KC, Song JH, El-Bakry AS (2012) Large neighborhood search for LNG inventory routing. J Heuristics 18(6):821–848

    Article  Google Scholar 

  • Golden BL, Raghavan S, Wasil EA (2008) The vehicle routing problem: latest advances and new challenges, vol 43. Springer, Berlin

    Book  Google Scholar 

  • Gounaris CE, Wiesemann W, Floudas CA (2013) The robust capacitated vehicle routing problem under demand uncertainty. Oper Res 61(3):677–693

    Article  MathSciNet  Google Scholar 

  • Grønhaug R, Christiansen M, Desaulniers G, Descrosiers J (2010) A branch-and-price method for a liquefied natural gas inventory routing problem. Transp Sci 44(3):400–415

    Article  Google Scholar 

  • Gupta D, Maravelias CT (2016) On deterministic online scheduling: major considerations, paradoxes and remedies. Comput Chem Eng 94:312–330

    Article  Google Scholar 

  • Gupta D, Maravelias CT (2017) A general state-space formulation for online scheduling. Processes 5(4):69

    Article  Google Scholar 

  • Gupta D, Maravelias CT, Wassick JM (2016) From rescheduling to online scheduling. Chem Eng Res Des 116:83–97

    Article  Google Scholar 

  • Harjunkoski I, Maravelias CT, Bongers P, Castro PM, Engell S, Grossmann IE, Hooker J, Méndez C, Sand G, Wassick J (2014) Scope for industrial applications of production scheduling models and solution methods. Comput Chem Eng 62:161–193

    Article  Google Scholar 

  • Janak SL, Lin X, Floudas CA (2007) A new robust optimization approach for scheduling under uncertainty: II. Uncertainty with known probability distribution. Comput Chem Eng 31(3):171–195

    Article  Google Scholar 

  • Jiang Y, Grossmann IE (2015) Alternative mixed-integer linear programming models of a maritime inventory routing problem. Comput Chem Eng 77:147–161

    Article  Google Scholar 

  • Kleywegt AJ, Nori VS, Savelsbergh MWP (2002) The stochastic inventory routing problem with direct deliveries. Transp Sci 36(1):94–118

    Article  Google Scholar 

  • Laporte G (2009) Fifty years of vehicle routing. Transp Sci 43(4):408–416

    Article  Google Scholar 

  • Laporte G, Gendreau M, Potvin JY, Semet F (2000) Classical and modern heuristics for the vehicle routing problem. Int Trans Oper Res 7(4–5):285–300

    Article  MathSciNet  Google Scholar 

  • Li Z, Ierapetritou M (2008) Process scheduling under uncertainty: review and challenges. Comput Chem Eng 32:715–727

    Article  Google Scholar 

  • Mastragostino R, Patel S, Swartz CLE (2014) Robust decision making for hybrid process supply chain systems via model predictive control. Comput Chem Eng 62(5):37–55

    Article  Google Scholar 

  • Méndez CA, Cerdá J, Grossmann IE, Harjunkoski I, Fahl M (2006) State-of-the-art review of optimization methods for short-term scheduling of batch processes. Comput Chem Eng 30(6):913–946

    Article  Google Scholar 

  • Mestan E, Türkay M, Arkun Y (2006) Optimization of operations in supply chain systems using hybrid systems approach and model predictive control. Ind Eng Chem Res 45(19):6493–6503

    Article  Google Scholar 

  • Moin NH, Salhi S (2007) Inventory routing problems: a logistical overview. J Oper Res Soc 58(9):1185–1194

    Article  Google Scholar 

  • Nandola NN, Rivera DE (2013) An improved formulation of hybrid model predictive control with application to production-inventory systems. IEEE Trans Control Syst Technol 21(1):121–135

    Article  Google Scholar 

  • Novas JM, Henning GP (2010) Reactive scheduling framework based on domain knowledge and constraint programming. Comput Chem Eng 34(12):2129–2148

    Article  Google Scholar 

  • Ortega M, Lin L (2004) Control theory applications to the production-inventory problem: a review. Int J Prod Res 42:2303–2322

    Article  Google Scholar 

  • Ouelhadj D, Petrovic S (2009) A survey of dynamic scheduling in manufacturing systems. J Sched 12:417–431

    Article  MathSciNet  Google Scholar 

  • Papageorgiou DJ, Nemhauser GL, Sokol J, Cheon M-S, Keha AB (2014) MIRPLib—a library of maritime inventory routing problem instances: survey, core model, and benchmark results. Eur J Oper Res 235(2):350–366

    Article  MathSciNet  Google Scholar 

  • Papageorgiou DJ, Cheon MS, Harwood S, Trespalacios F, Nemhauser GL (2018) Recent progress using matheuristics for strategic maritime inventory routing. In: Konstantopoulos C, Pantziou G (eds) Modeling, computing and data handling methodologies for maritime transportation, Springer, Cham, pp 59–94

    Chapter  Google Scholar 

  • Perea-López E, Ydstie BE, Grossmann IE (2003) A model predictive control strategy for supply chain optimization. Comput Chem Eng 27(8):1201–1218

    Article  Google Scholar 

  • Pinedo M (2012) Scheduling: theory, algorithms, and systems. Springer, Berlin

    Book  Google Scholar 

  • Pochet Y, Wolsey LA (2006) Production planning by mixed integer programming. Springer, Berlin

    MATH  Google Scholar 

  • Rakke JG, Stålhane M, Moe CR, Christiansen M, Andersson H, Fagerholt K, Norstad I (2011) A rolling horizon heuristic for creating a liquefied natural gas annual delivery program. Transp Res C-EMER 19(5):896–911

    Article  Google Scholar 

  • Ronen D (2002) Marine inventory routing: shipments planning. J Oper Res Soc 53(1):108–114

    Article  Google Scholar 

  • Sahin F, Robinson EP, Gao L-L (2008) Master production scheduling policy and rolling schedules in a two-stage make-to-order supply chain. Int J Prod Econ 115(2):528–541

    Article  Google Scholar 

  • Sarimveis H, Patrinos P, Tarantilis CD, Kiranoudis CT (2008) Dynamic modeling and control of supply chains: a review. Comput Oper Res 35:3530–3561

    Article  Google Scholar 

  • Singh T, Arbogast JE, Neagu N (2015) An incremental approach using local-search heuristic for inventory routing problem in industrial gases. Comput Chem Eng 80:199–210

    Article  Google Scholar 

  • Siswanto N, Essam D, Sarker R (2011) Solving the ship inventory routing and scheduling problem with undedicated compartments. Comput Ind Eng 61(2):289–299

    Article  Google Scholar 

  • Song J-H, Furman KC (2013) A maritime inventory routing problem: practical approach. Comput Oper Res 40(3):657–665

    Article  Google Scholar 

  • Subramanian K, Maravelias CT, Rawlings JB (2012) A state-space model for chemical production scheduling. Comput Chem Eng 47:97–110

    Article  Google Scholar 

  • Subramanian K, Rawlings JB, Maravelias CT, Flores-Cerrillo J, Megan L (2013) Integration of control theory and scheduling methods for supply chain management. Comput Chem Eng 51:4–20

    Article  Google Scholar 

  • Subramanian K, Rawlings JB, Maravelias CT (2014) Economic model predictive control for inventory management in supply chains. Comput Chem Eng 64:71–80

    Article  Google Scholar 

  • Toth P, Vigo D (2001) The vehicle routing problem. Society for Industrial and Applied Mathematics, Philadelphia

    MATH  Google Scholar 

  • Verderame PM, Elia JA, Li J, Floudas CA (2010) Planning and scheduling under uncertainty: a review across multiple sectors. Ind Eng Chem Res 49(9):3993–4017

    Article  Google Scholar 

  • Vieira G, Herrmann JW, Lin E (2003) Rescheduling manufacturing systems: a framework of strategies, policies, and methods. J Sched 6:39–62

    Article  MathSciNet  Google Scholar 

  • Wonnacott TH, Wonnacott RJ (1990) Introductory statistics for business and economics. Wiley, Toronto

    MATH  Google Scholar 

  • Zhang Q, Sundaramoorthy A, Grossmann IE, Pinto JM (2017) Multiscale production routing in multicommodity supply chains with complex production facilities. Comput Oper Res 79:207–222

    Article  MathSciNet  Google Scholar 

  • Zhang C, Nemhauser G, Sokol J, Cheon MS, Keha A (2018) Flexible solutions to maritime inventory routing problems with delivery time windows. Comput Oper Res 89:153–162

    Article  MathSciNet  Google Scholar 

Download references

Acknowledgements

The authors would like to acknowledge financial support from the US National Science Foundation under grant CBET- 1264096.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Christos T. Maravelias.

Electronic supplementary material

Below is the link to the electronic supplementary material.

Supplementary material 1 (PDF 1407 kb)

Appendix: Algorithms

Appendix: Algorithms

Algorithm A1 Check time charter availability

If all desired time-chartered vessels are available, the algorithm ends with resolve equal to no; otherwise, resolve returns yes. In line 5, \(\varepsilon_{L} (t)\) denotes the probability that a vessel is available at time \(t\). In line 10, \(\lambda^{LC}\) denotes the earliest time a time charter is guaranteed to be available. In the case study, \(t_{LA} = 7,t_{LB} = 21,\varepsilon_{L} (t_{LA} ) = 0.85, \varepsilon_{L} (t_{LB} ) = 1,\lambda^{LC} = 21\).

figure b

Algorithm A2 Update availability of voyage charters

The availability profiles of voyage charters are cluster-specific. For each cluster l, we (1) remove the vessels that were reserved in the previous period (lines 2–3); (2) update the times when vessels become available (lines 4–15); (3) sort those times in ascending order (line 16); and (4) generate new availability profile (lines 17–19). In line 2, \(nlast_{l}\) is the number of trips in cluster l reserved in the last period. Parameters \(\varepsilon_{SA} , \varepsilon_{SB} , \varepsilon_{SC} , \varepsilon_{SD}\) denote the probability that the time a vessel becomes available remains unchanged, decreases by 1 period, increases by 1 period, and increases by 2 periods, respectively. For example, in the case that the time a vessel becomes available is unchanged, the new \(\delta_{ln}^{S}\) is the old \(\delta_{ln}^{S}\) minus one (line 7), because the horizon has been rolled forward by one day. It is also possible that a previously available vessel is reserved by another party, and thus becomes unavailable, as shown in line 15. In the case study, \(\varepsilon_{SA} = 0.75,\varepsilon_{SB} = 0.05,\varepsilon_{SC} = 0.05,\varepsilon_{SD} = 0.05, newA = 9,newB = 12\).

figure c

Algorithm A3 Check availability of voyage charters

The availability of voyage charters is checked for each cluster; if some desired vessels are not available, resolve returns yes.

figure d

Algorithm A4 Update parameters due to trip delays

There are three types of trip delays: (1) a reserved vessel that is yet to arrive can be late for 1 period with a probability of \(\varepsilon_{DI1}\) or 2 periods with a probability \(\varepsilon_{DI2}\) (lines 1–6 and 7–12 respectively for time and voyage charters); (2) an ongoing trip can have a delay of 1/2 periods with a probability \(\varepsilon_{DO1} /\varepsilon_{DO2}\) (lines 13–18 and 19–24 for the time- and voyage-chartered vessels, respectively); and (3) a pick-up/delivery can be 1/2 period longer with a probability \(\varepsilon_{DT1} /\varepsilon_{DT2}\) (lines 25–32,33–40 respectively for time and voyage charters). Note that even though the probability of delay at each time period does not depend on trip length, longer trips tend to have larger delays, because they have more time periods during which delays can be observed. In the case study, \(\varepsilon_{DI1} = 0.15,\varepsilon_{DI2} = 0.05,\varepsilon_{DO1} = 0.08,\varepsilon_{DO2} = 0.02,\varepsilon_{DT1} = 0.15,\varepsilon_{DT2} = 0.05.\)

figure e

Algorithm A5 Update pick-up windows

For pick-up windows whose estimated start time is \(t = \lambda^{PU}\), the actual start time and window length are specified. Parameter newC is the maximum adjustment of the start time; newD/newE is the shortest/longest window length. In the case study, \(newC = 3,newD = 2,newE = 3\).

figure f

Algorithm A6 Update initial inventory

The real-time initial inventory level is updated using a normal distribution. The consumption/production rate in the last period is included in \(L_{jm1}\). In the case study, \(\sigma_{AF} = 0.05\).

figure g

Algorithm A7 Update forecast consumption/production rate

Consumption/production forecast rate are updated using a normal distribution. In the case study, \(\sigma_{FF} = 0.05\).

figure h

Algorithm A8 Fix variables according to decisions made previously

Variables related to three types of decisions are fixed. First, the vessel company should be notified \(\lambda^{LR}\) periods before returning a time charter (lines 1–2). Second, decisions regarding time charters made previously are fixed (lines 3–4); \(\delta^{LE}\) is the earliest time when a time charter becomes available (updated in lines 20–23 in Algorithm 1). Finally, decisions regarding voyage charters are fixed (lines 5–8). In the case study, \(\lambda^{LR} = 15\).

figure i

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Dong, Y., Maravelias, C.T. & Jerome, N.F. Reoptimization framework and policy analysis for maritime inventory routing under uncertainty. Optim Eng 19, 937–976 (2018). https://doi.org/10.1007/s11081-018-9383-8

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11081-018-9383-8

Keywords

Navigation