Variables Clustering Method to integrate SSCP and DDMRP

Proceedings of The 4th International Conference on Management, Economics and Finance

Year: 2021

DOI:

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Variables Clustering Method to integrate SSCP and DDMRP

Emilio Bertolotti

 

ABSTRACT: 

Planning of large-scale Supply Chains remains a genuine challenge because of the huge number of decisions variables to be handled. These planning problems can be formally described as Multi-Objective Combinatorial Optimization (MOCO) models. Two major techniques known as Synchronized Supply Chain Planning (SSCP) based on Mixed Integer Programming (MIP) and Demand Driven Material Requirements Planning (DDMRP) based on ad-hoc heuristics have been developed to tackle extensive supply chain planning problems. In this paper, we describe and analyze a new supply chain planning paradigm, the “Variables Clustering Method” (VCM), that integrates SSCP and DDMRP rather than treating them as alternate independent planning methods. The application of VCM allows to effectively solve larger supply chain planning instances that could be hardly solvable with more traditional approaches.

Keywords: SCM, MIP, MOCO, SCP (SSCP), DDMRP.