An intercontinental replenishment problem: A hybrid approach

Abstract

This work addresses a case study in an intercontinental supply chain. The problem emerges in a company in Angola dedicated to the trade of consumable goods for construction building and industrial maintenance. The company in Angola sends the replenishment needs to a Portuguese company, which takes the decision of which products and in which quantities will be sent by shipping container to the company in Angola. The replenishment needs include the list of products that reached the corresponding reorder point. The decision of which products and in which quantity should take into consideration a set of practical constraints: the maximum weight of the cargo, the maximum volume the cargo and financial constraints related with the minimum value that guarantees the profitability of the business and a maximum value associated with shipping insurance. A 2-stage hybrid method is proposed. In the first stage, an integer linear programming model is used to select the products that maximise the sales potential. In the second stage, a Container Loading Algorithm is used to effectively pack the selected products in the shipping container ensuring the geometrical constraints, and safety constraints such as weight limit and stability. A new set of problem instances was generated with the 2DCPackGen problem generator, using as inputs the data collected in the company. Computational results for the algorithm are presented and discussed. Good results were obtained with the solution approach proposed, with an average occupation ratio of 92% of the container and an average gap of 4% for the solution of the integer linear programming model. © Springer International Publishing AG 2018.