Simulation-optimisation based framework for Sales and Operations Planning taking into account new products opportunities in a co-production context

摘要

Highlights?In North American lumber mills, new products demand lead to uncertain profits.?A simulation-optimisation based framework is proposed to handle new products demand.?A log breakdown simulator is used to create production data.?An optimization model then generates a sales and operations plan.?Through a case study, the benefits of the approach are shown.AbstractThe North American lumber industry produces mostly commodity products (i.e. products with standard dimensions and properties). However, some customers also want products showing very specific characteristics. Because sawing involves co-production (many different types of lumbers are obtained from a single tree), sawmills do not know how the introduction of a new “speciality” product will affect quantities for the other products they also produce. We propose a simulation-optimisation based framework to tackle the kinds of problems such as these, where classical formulations cannot be used. A log breakdown simulator is used in combination with a tactical planning model in order to realise Sales and Operations Planning. The plan gives the information to the decision maker about which orders for speciality products should be accepted, what to produce and when, as well as the equipment settings to use and the raw material to buy/consume at each period. Through an industry-inspired case study, we show how the framework can lead to substantial benefits.]]>