Optimizing the tactical planning in the Fast Moving Consumer Goods industry considering shelf-life restrictions

M. A.H. Van Elzakker*, E. Zondervan, N. B. Raikar, H. Hoogland, I. E. Grossmann

*Corresponding author for this work

Research output: Contribution to journalConference articleAcademicpeer-review

8 Citations (Scopus)

Abstract

This paper addresses the optimization of the tactical planning for the Fast Moving Consumer Goods industry using an MILP model. To prevent unnecessary waste and missed sales, shelf-life restrictions are introduced using three methods. The direct method tracks the age of products directly. While it provides optimal solutions, it is computationally inefficient. The indirect method forces products to leave inventory before the end of their shelf-life. It obtains solutions within a few percent of optimality. Moreover, compared to the direct method, the computational time was on average reduced by a factor 32. The hybrid method models the shelf-life directly in the first and indirectly in the second storage stage. It obtains near optimal solutions and, on average, reduces the required computational time by a factor 5 compared to the direct method. Cases containing up to 25, 100, and 1000 SKUs were optimized using the direct, hybrid and indirect method respectively.

Original languageEnglish
Pages (from-to)98-109
Number of pages12
JournalComputers and Chemical Engineering
Volume66
DOIs
Publication statusPublished - 4 Jul 2014
Externally publishedYes
EventEuropean Symposium on Computer Aided Process Engineering-23 - Lappeenranta, Finland
Duration: 9 Jun 201312 Jun 2013

Keywords

  • Enterprise-Wide Optimization
  • Fast Moving Consumer Goods
  • MILP
  • Shelf-life
  • Tactical planning

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