The structure of a company's distribution network is of vital importance for competitiveness but also involves considerable costs. In recent years, competitive pressure as well as regulatory measures, especially in the European Union, have also raised awareness towards the environmental impact of supply chain activities. However, activities associated with the distribution of products are not yet subject to environmental regulations but this might change in the near future. Therefore, companies will have to consider not only economic but also environmental aspects in the design of their supply chains. Based on a case study from the petrochemical industry we present a way to evaluate (strategic) distribution network design decisions, taking into account economic as well as environmental criteria. The results of the analysis show a clear trade-off between (distribution) costs and transport carbon emissions. (author's abstract)

Höganäs AB's current distribution network for iron powder in the Asia Pacific (APAC) region is subject to high costs incurred by large inventories and high cost of capital. As a result of increasing demand and service level requirements from customers, inventories have steadily increased. Keeping a high inventory level has enabled high service levels irrespective of supply disruptions or changes in demand. It is important that the distribution network incorporates a balance between robustness and cost efficiency and not only focuses on one of these aspects. The purpose of this project is to provide Höganäs AB with scientific data on how the distribution network can be improved in terms of lowering the total cost of warehousing and distribution while maintaining or improving customer service. There are several goals for this project. The first goal is to optimize the flow of material in the distribution network given empirical data of customer demand. The intended model is a linear program. The linear program will solve a multi echelon, period, product, location and transportation mode instance of the distribution network design problem. The second goal is to test the robustness of the optimal solutions resulting from the linear program by stochastic simulation. The simulations utilize the optimal network designs generated by the linear program and is done for a set of possible scenarios where key parameters are changed. By adjusting key parameters and measuring the effect on cost and service level, the goal is to evaluate the robustness of each configuration. By keeping the existing nodes of the distribution network and changing the flow of material and distribution strategy, lower inventories can be maintained and service level kept high regardless of demand growth and supply disruption. The optimal distribution network design is one from the linear program, configured with a 14 day inventory level and 10 day reorder point for warehouses. The optimal design shows that distribution is made more robust and efficient by allowing for distribution between warehouses or supplying customers normally affiliated with other warehouses. It also suggests that a central redistribution warehouse is a possible improvement to the current network design. / Höganäs AB's nuvarande distributionsnätverket for järnpulver i Asien-Stillahavsregionen (APAC) är kostsamt till följd av höga lagernivåer och kapitalkostnader. Ökande efterfrågan och krav på hög servicenivå har inneburit en stadig ökning av lagernivåerna, vilket möjliggjort för företaget att upprätthålla servicenivån oberoende av störningar i leveranskedjan eller förändringar i efterfrågan. Det är viktigt att distributionsnätverket är balanserat avseende stabilitet och kostnadseffektivitet och inte endast optimeras avseende en av faktorerna. Syftet med projektet är förse Höganäs AB vetenskapligt understödd information om hur den totala kostnaden för distributionsnätverket kan sänkas samtidigt som kundservicen upprätthålls eller förbättras. Det finns flera mål för projektet. Det första målet är att optimera materialflödet i distributionsnätverket givet empiriska data över efterfrågan. Den avsedda modellen är ett linjärprogram som löser en instans av distributionsnätverkverksdesign-problemet med multipla lager, perioder, produkter, lokaliseringar och transportsätt. Det andra målet är att utvärdera stabiliteten hos de optimala lösningar som härrör från linjärprogrammet genom stokastisk simulering. Simuleringarna använder de optimala nätverksdesigner som genereras av det linjärprogrammet och genomförs för en uppsättning möjliga scenarier där nyckelparametrar ändras. Genom att justera nyckelparametrar och mäta effekten på kostnad och servicenivå är målet att utvärdera stabiliteten för varje konfiguration. Genom att behålla de befintliga noderna i distributionsnätverket och ändra materialflödet samt distributionsstrategin kan lägre lagernivåer uppnås och servicenivån hålls hög oavsett förändrad efterfrågan och störningar i leveranskedjan. Den optimala distributionsnätverkverksdesignen är en lösning från linjärprogrammet konfigurerat med 14 dagars lagernivå och 10 dagars beställningspunkt. Den optimala designen visar att distributionen görs mer stabil och effektiv genom att tillåta leveranser mellan lagerpunkterna eller att försörja kunder från andra lagerpunkter än de normalt försörjs från. Resultatet påvisar också att en strategiskt placerad omlastningscentral kan förbättra det nuvarande distributionsnätverket.

Hyper-heuristics is a new field of optimisation which has recently emerged and is receiving growing exposure in the research community and literature. Hyper-heuristics are optimisation methods which are designed with a high level of abstraction from any one specific problem or class of problems and therefore are more generally applicable than specialised meta-heuristic and heuristic methods. Instead of being designed to solve a specific real-world problem, hyper-heuristics are designed to solve the problem of heuristic generation and selection. As such, hyper-heuristics can be thought of as methods for optimising the operations of an optimisation process which finds good solutions to a problem as a by-product. This approach has been shown to be very effective and in some cases provides improvement in search performance as well as reducing the burden associated with tailoring meta-heuristics which is often required when solving new problems. In this thesis, the hypothesis that hyper-heuristics can be competitively applied to real-world multi-objective optimisation problems such as the water distribution design problem is tested. Although many single-objective hyper-heuristics have been proposed in the literature, only a few multi-objective methods have been proposed. This thesis explores two different novel multi-objective hyper-heuristics: one designed for generating new specialised heuristics; and one designed for solving the online selection of heuristics. Firstly, the behaviour of a set of heuristics is explored to create a base understanding of different heuristic behavioural traits in order to better understand the hyper-heuristic behaviours and dynamics later in the study. Both approaches are tested on a range of benchmark optimisation problems and finally applied to real-world instances of the water distribution network design problem where the selective hyper-heuristics is demonstrated as being very effective at solving this difficult problem. Furthermore, the thesis demonstrates how heuristic selection can be improved by incorporating a greater level of information about heuristic performance, namely the historical joint performance of different heuristics, and shows that exploiting this sequencing information in heuristic selection can produce highly competitive results.

The realization of planning, design, construction, operation and maintenance of water supply systems pictures one of the largest infrastructure projects of municipalities / water distribution networks should be designed very meticulously. Genetic algorithm is an optimization method that is based on natural evolution and is used for the optimization of water distribution networks. Genetic algorithm is comprised of operators and the operators affect the performance of the algorithm. Although these operators are related with parameters, not much attention has been given for the determination of these parameters for this specific field of water distribution networks. This study represents a novel methodology, which investigates the parameters of the algorithm for different networks. The developed computer program is applied to three networks. Two of these networks are well known examples from the literature / the third network is a pressure zone of Ankara water distribution network. It is found out that, the parameters of the algorithm are related with the network, the case to be optimized and the developed computer program. The pressure penalty constant value varied depending on the pipe costs and the network characteristics. The mutation rate is found to vary in a range of [0.0075 &ndash / 0.0675] for three networks. Elitism rate is determined as the minimum value for the corresponding population size. Crossover probability is found to vary in a range of [0.5 &ndash / 0.9]. The methodology should be applied to determine the appropriate parameter set of genetic algorithm for each optimization study. Using the method described, fairly well results are obtained.

The recently growing concerns of customers and governments about environmental protection and greenhouse gas reduction have forced companies to integrate the topic of environmental sustainability into their decision making. Facility location decisions are of special relevance in this respect because of their strategic nature. Furthermore, many different trade-offs must be considered, for example between operational costs and customer service. But as soon as environmental issues are concerned, other critical issues must be considered as well. Based on a case study from the petrochemical industry, this paper extends two basic facility location models and shows the impact of distribution network-design decisions on the economic and environmental performance of the company. The results show a trade-off between total (distribution) costs and transport carbon emissions. (authors' abstract)

Avec la forte croissance du e-commerce et l'augmentation continue de la population des villes impliquant des niveaux de congestion plus élevés, les réseaux de distribution doivent déployer des échelons supplémentaires pour offrir un ajustement dynamique aux besoins des entreprises au cours du temps et faire face aux aléas affectant l’activité de distribution. Dans ce contexte, les praticiens s'intéressent aux réseaux de distribution à deux échelons. Dans cette thèse, nous commençons par présenter une revue complète des problèmes de design des réseaux de distribution et souligner des caractéristiques essentielles de modélisation. Ces aspects impliquent la structure à deux échelons, l’aspect multi-période, l’incertitude et les méthodes de résolution. Notre objectif est donc, d’élaborer un cadre complet pour le design d’un réseau de distribution efficace à deux échelons, sous incertitude et multi-périodicité, dans lequel les produits sont acheminés depuis les plateformes de stockage (WP) vers les plateformes de distribution (DP) avant d'être transportés vers les clients. Ce cadre est caractérisé par une hiérarchie temporelle entre le niveau de design impliquant des décisions relatives à la localisation des plateformes et à la capacité allouée aux DPs sur une échelle de temps annuelle, et le niveau opérationnel concernant des décisions journalières de transport. % sur une base journalière.Dans une première étude, nous introduisons le cadre complet pour le problème de design de réseaux de distribution à deux échelons avec une demande incertaine, une demande et un coût variables dans le temps. Le problème est formulé comme un programme stochastique à plusieurs étapes. Il implique au niveau stratégique des décisions de localisation des DPs ainsi que des décisions d'affectation des capacités aux DPs sur plusieurs périodes de design, et au niveau opérationnel des décisions de transport sous forme d'arcs origine-destination. Ensuite, nous proposons deux modèles alternatifs basés sur la programmation stochastique à deux étapes avec recours, et les résolvons par une approche de décomposition de Benders intégrée à une technique d’approximation moyenne d’échantillon (SAA). Par la suite, nous nous intéressons à la livraison du dernier kilomètre dans un contexte urbain où les décisions de transport dans le deuxième échelon sont caractérisées par des tournées de véhicules. Un problème multi-période stochastique de localisation-routage à deux échelons avec capacité (2E-SM-CLRP) est défini, dans lequel les décisions de localisation concernent les WPs et les DPs. Le modèle est un programme stochastique à deux étapes avec recours en nombre entier. Nous développons un algorithme de décomposition de Benders. Les décisions de localisation et de capacité sont déterminées par la solution du problème maître de Benders. Le sous-problème résultant est un problème multi-dépôt de tournées de véhicule avec des dépôts et véhicules capacitaires qui est résolu par un algorithme de branch-cut-and-price.Enfin, nous étudions le cadre à plusieurs étapes proposé pour le problème stochastique multi-période de design de réseaux de distribution à deux échelons et évaluons sa tractabilité. Pour ceci, nous développons une heuristique à horizon glissant qui permet d’obtenir des bornes de bonne qualité et des solutions de design pour le modèle à plusieurs étapes. / With the high growth of e-commerce and the continuous increase in cities population contrasted with the rising levels of congestion, distribution schemes need to deploy additional echelons to offer more dynamic adjustment to the requirement of the business over time and to cope with all the random factors. In this context, a two-echelon distribution network is nowadays investigated by the practitioners.In this thesis, we first present a global survey on distribution network design problems and point out many critical modeling features, namely the two-echelon structure, the multi-period setting, the uncertainty and solution approaches. The aim, here, is to propose a comprehensive framework for the design of an efficient two-echelon distribution network under multi-period and stochastic settings in which products are directed from warehouse platforms (WPs) to distribution platforms (DPs) before being transported to customers. A temporal hierarchy characterizes the design level dealing with facility-location and capacity decisions over a set of design periods, while the operational level involves transportation decisions on a daily basis.Then, we introduce the comprehensive framework for the two-echelon distribution network design problem under uncertain demand, and time-varying demand and cost, formulated as a multi-stage stochastic program. This work looks at a generic case for the deployment of a retailer's distribution network. Thus, the problem involves, at the strategic level, decisions on the number and location of DPs along the set of design periods as well as decisions on the capacity assignment to calibrate DP throughput capacity. The operational decisions related to transportation are modeled as origin-destination arcs. Subsequently, we propose alternative modeling approaches based on two-stage stochastic programming with recourse, and solve the resulting models using a Benders decomposition approach integrated with a sample average approximation (SAA) technique.Next, we are interested in the last-mile delivery in an urban context where transportation decisions involved in the second echelon are addressed through multi-drop routes. A two-echelon stochastic multi-period capacitated location-routing problem (2E-SM-CLRP) is defined in which facility-location decisions concern both WPs and DPs. We model the problem using a two-stage stochastic program with integer recourse. To solve the 2E-SM-CLRP, we develop a Benders decomposition algorithm. The location and capacity decisions are fixed from the solution of the Benders master problem. The resulting subproblem is a capacitated vehicle-routing problem with capacitated multi-depot (CVRP-CMD) and is solved using a branch-cut-and-price algorithm.Finally, we focus on the multi-stage framework proposed for the stochastic multi-period two-echelon distribution network design problem and evaluate its tractability. A scenario tree is built to handle the set of scenarios representing demand uncertainty. We present a compact formulation and develop a rolling horizon heuristic to produce design solutions for the multi-stage model. It provides good quality bounds in a reasonable computational times.

The need of water and the limited sources, force the researchers to find the most economical and feasible solution in the design of a water distribution network. In this study, reliability and optimization of a water distribution network are taken into account together in the design stage of the network. The relationship between reliability of a water distribution network and its cost is examined during the design of a water distribution network. A methodology for deciding the reliability level of the selected design is proposed by examining the reliability-cost relationship. The design alternatives for the case study area are obtained by the aid of a commercially available software WADISO employing partial enumeration optimization technique. The reliability value for each of the design alternative is calculated according to Misirdali (2003)&rsquo / s adaptation based on the methodology proposed by Bao and Mays (1990) by the aid of a hydraulic network solver program HapMam prepared by Nohut&ccedil / u (2002). For purposes of illustration, the skeletonized form of Ankara Water Distribution Network subpressure zone (N8-1) is taken as the case study area. The methodology in this study, covering the relation between the reliability and the cost of a water distribution network and the proposed reliability level can be used in the design of new systems.

Hästens Beds is a Swedish luxury bed manufacturer, located in Köping, Sweden. They have a strong global presence, with Europe being the most mature and proven market. European retailers, called Hästens Partners, are serviced from the central warehouse in Borås which also handles all non-European export to Hästens’ other warehouse facilities in Hong Kong and the United States. As a part of Hästens’ planned growth journey, they are interested in reevaluating their European distribution network from a total cost and delivery service perspective. Hence, the purpose of this master’s thesis is to evaluate alternate distribution network designs in Europe for Hästens to reduce total logistics costs without impairing the delivery service level.  Extensive literature studies and initial interviews were conducted to understand both the theoretical field and the Hästens’ case-specific context. Based on this, three main research questions and a corresponding method resulted in a three-step approach to answer the purpose of the study.  In order to generate network structures and then analyze them, it was first necessary to determine the factors that should be included. Cost functions were created based on curve fitting, based on identified cost drivers for the included cost parameters of warehousing, transportation, and inventory carrying. Furthermore, the customer order lead time was concluded to be very generous. This had the consequence of the distribution lead time not putting any constraints on the network design. Lastly, access to transportation infrastructure, especially a port for handling the non-European export, and the general cost disparity between neighboring regions were concluded to be other important factors for the specific case of Hästens.  Center of gravity analyses based on the identified cost driver for outbound costs, m3-km, were then used to generate 13 candidate warehouse locations. In some cases, these locations were altered to better align with the identified important factors of good access to transportation infrastructure and cost disparity. The most strategically viable combinations of the number and echelons of warehouses could be limited to three combinations, all consisting of a single echelon with one, two, or three warehouses respectively. Therefore, three network optimization scenarios were created, minimizing the total cost of inbound and outbound transportation, which led to the generated network alternatives.  Finally, the total logistics costs were calculated and analyzed for the three alternative structures and a model replica of the current structure by utilizing the cost functions for each included cost parameter. The alternatives were also discussed based on delivery service theory and quantified with regard to distances to Partners. After applying sensitivity analysis and discussing the results’ implications for Hästens, Alternative 2* was formed with warehouses in Borås and Rotterdam. All the alternatives’ total logistics costs and average distances to Partners are quantified below.  [TABLE] As can be seen, the cost savings from Alternative 1 compared with the current network are marginal, and the costs of Alternative 2 and 2* are highly similar. Further, preliminary analysis showed that Alternative 2* would not be economically profitable until at least a 500% increase in European outbound transportation volumes. The conclusion that could be drawn from this was that Hästens is not yet suited to scale up its European distribution network to operate more than one warehouse. However, when future sales volumes allow for it, a European distribution center in Rotterdam could be profitable and provide European customers with greater delivery service.

Bakgrund: Företag kan använda sig av flera olika distributionsprocesser för att leverera produkter till kunder och alla dessa distributionsprocesser innebär olika kostnader, förutsättningar och hinder. Distributionskostnaden består av transport-, hanterings-, lagrings- och informationskostnad och utgör hos många företag en stor andel av de totala produktkostnaderna. Kostnaderna påverkas av hur ett företag väljer att utforma sin distributionsstruktur. Vid utformning av en distributionsstruktur finns det även vissa faktorer att ta hänsyn till, såsom olika kundkrav. Dessa faktorer och kostnader behöver samlas i ett ramverk för att kunna utgöra beslutsunderlag för företag. Syfte: Studien syftar till att utveckla ett teoretiskt ramverk för val av distributionsstruktur. Vidare syftar studien till att applicera ramverket på fallföretaget för att demonstrera hur ramverket kan tillämpas och branschanpassas. Slutligen redovisas möjliga kostnadsbesparingar för fallföretaget och en handlingsplan för att uppnå besparingarna. Tillvägagångssätt: Studien är en fallstudie på möbelåterförsäljaren Svenssons i Lammhult. Utifrån intervjuer och observationer har fallföretagets nuläge kartlagts i form av en processkarta. Därefter har ett teoretiskt ramverk för val av distributionsstruktur utformats och tillsammans med nulägesbeskrivningen har kostnader för alternativa distributionsprocesser beräknats på 30 utvalda produkter. Utifrån kostnadsberäkningarna har en ny distributionsstruktur presenterats tillsammans med en handlingsplan för en övergång till den nya distributionsstrukturen. Slutsats: Den största kostnadsbesparingen, cirka 2.000.000 kr, uppnås vid en övergång till direktleverans för de hemlevererade produkter som i dagsläget endast skickas med produkter från en leverantör. Vidare kostnadsbesparingar är uppnåbara genom att distribuera mindre produkter via upphämtningsplats istället för att dessa levereras hem till kund. För att implementera dessa förändringar kan förhandlingar med leverantörer krävas och kostnader för integrerade informationssystem kan uppstå. / Background: Companies can use a variety of distribution processes in order to deliver their products to their customers and all of these distribution processes results in different costs. The distribution costs are transport, handling, storage and information costs and these costs constitute a large share of the total product cost for many companies. Depending on how a company designs their distribution structure the resulting cost varies. There are also several factors that influence the design of a distribution structure, such as various customer requirements. When gathering these factors and costs in a framework it is possible to use the framework when making business decisions. Purpose: The purpose of the study is to develop a theoretical framework designed to choose a distribution structure. Furthermore, the framework will be applied on the case company in order to demonstrate how the framework can be applied on the case company and adapted to an industry. Lastly, possible savings for the case company will be demonstrated and an action plan for reaching these savings will be presented. Methodology: The study is a case study at the furniture retailer Svenssons i Lammhult. A current state map has been created through interviews and observations at the case company. Thereafter a theoretical framework for choosing a distribution structure has been developed, and by using the current state map, cost calculations for alternative distribution processes has been carried out on 30 selected products. Based on the cost calculations a new distribution structure and an action plan has been presented. Conclusions: The largest savings, about 2.000.000 SEK, can be achieved by a transition to direct delivery for home delivered products that are being ordered with products from a single supplier. Further cost savings can be achieved by distributing smaller products through pickup points instead of home delivery. To implement these changes the case company needs to negotiate with their suppliers and investigate costs for implementing integrated information systems with their suppliers.K