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Optimisation of
purchases,
supply,
stocks,
recipes over various periods
with constraints on the variation of the recipe
composition and
accounting for future price uncertainty
in a single optimisation
Frits Fredrick
Radar Automation
Factory1 Factory3
Factory2
Market2
wheat
Market1
wheatSales
1&2
wheat
Sales3
wheat
Consumption 1
wheat
Consumption 3
wheat
Consumption 2
wheat
Purchase 1->1
wheat
Purchase 1->2
wheat
Purchase 2->2
wheat
Purchase 2->3
wheatReport1 wheat Report3 wheat
Report2 wheat
Generic outline
Factory1 Factory3
Factory2
Market2
wheat
Market1
wheat
Sales2
wheat
Market3
wheat
Consumption 1
wheat
Consumption 3
wheat
Consumption 2
wheat
Purchase 1->1
wheat
Purchase 2->2
wheat
Purchase 3->3
wheat
Sales1
wheat
Sales3
wheat
Report1 wheat
Report3 wheat
Report2 wheat
Scenario with
purchase per factory
Factory1 Factory3
Factory2
Market
wheat
Sales
wheat
Consumption 1
wheat
Consumption 3
wheat
Consumption 2
wheat
Purchase ->1
wheat
Purchase ->2
wheat
Purchase ->3
wheat
Report1 wheat
Report3 wheatReport2 wheat
Scenario with single
market, supply per
factory
Which outline fits with your business?
Single
market, single
fatory
Single
market,
multiple
factories
(price per
factory)
Multiple
markets,
multiple
factories
(many on
many)
Input for each location (period)
Formula
Tonnage
Raw material
Initial
availability
Stock cost
Factories
Raw material
Availability
Markets
Input for each flux (per period/ per raw
material)
Price or cost
Minimum and
maximum
Market
Factory
Market,
sales
Possible logistic constraints for each period
• Minimum/maximum purchase or sales, for each raw material or for
each purchase group
• Minimum/maximum availability on the market for each raw
material or purchase group
• Minimum/maximum supply for each raw material to each factory
• Minimum/maximum consumption for each raw material, in each
factory
• Minimum/maximum stock for each raw material or raw material
group and for each factory
Possible constraints for each recipe and
period
• Minimum/maximum on the incorporation of each raw
• Minimum/maximum on the increase/decrease on each raw material
with respect to the incorporation of the previous period
• Minimum/maximum on the nutritional value of each nutrient
• Minimum/maximum on the increase/decrease on each nutrient
with respect to its value in the previous period
Output for each location (period)
Raw material
Consumption
Stock
Formula
Price
Factory
Raw material
Purchase
Quantity sold
Market
Optimise decision making : when and how many
to buy of each raw material (overview of
purchases per period)
In the following case studies, we used the
following outline:
a single market,
with a restricted availability for some raw materials
per period on the market,
purchase prices per factory and per period,
limited stock capacity for some raw materials,
limited supply capacity for some raw materials and
factories,
limited capacity to consume some raw materials in
some factories,
Optimise decision making : when and how many to
buy of each raw material (raw material supply and
consumption per factory and per per period)
Optimise decision making : when and how
many to buy of each raw material (logistic
constraints)
Anticipate on future prices when applying
tolerances : optimising without tolerances
Accounting for the tolerances on maize (-5%,+5%)
when optimising : anticipate on the price decrease
in october, therefore a less pronounced decline in
summer

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Multiperiode outline

  • 1. Optimisation of purchases, supply, stocks, recipes over various periods with constraints on the variation of the recipe composition and accounting for future price uncertainty in a single optimisation Frits Fredrick Radar Automation
  • 2. Factory1 Factory3 Factory2 Market2 wheat Market1 wheatSales 1&2 wheat Sales3 wheat Consumption 1 wheat Consumption 3 wheat Consumption 2 wheat Purchase 1->1 wheat Purchase 1->2 wheat Purchase 2->2 wheat Purchase 2->3 wheatReport1 wheat Report3 wheat Report2 wheat Generic outline
  • 3. Factory1 Factory3 Factory2 Market2 wheat Market1 wheat Sales2 wheat Market3 wheat Consumption 1 wheat Consumption 3 wheat Consumption 2 wheat Purchase 1->1 wheat Purchase 2->2 wheat Purchase 3->3 wheat Sales1 wheat Sales3 wheat Report1 wheat Report3 wheat Report2 wheat Scenario with purchase per factory
  • 4. Factory1 Factory3 Factory2 Market wheat Sales wheat Consumption 1 wheat Consumption 3 wheat Consumption 2 wheat Purchase ->1 wheat Purchase ->2 wheat Purchase ->3 wheat Report1 wheat Report3 wheatReport2 wheat Scenario with single market, supply per factory
  • 5. Which outline fits with your business? Single market, single fatory Single market, multiple factories (price per factory) Multiple markets, multiple factories (many on many)
  • 6. Input for each location (period) Formula Tonnage Raw material Initial availability Stock cost Factories Raw material Availability Markets
  • 7. Input for each flux (per period/ per raw material) Price or cost Minimum and maximum Market Factory Market, sales
  • 8. Possible logistic constraints for each period • Minimum/maximum purchase or sales, for each raw material or for each purchase group • Minimum/maximum availability on the market for each raw material or purchase group • Minimum/maximum supply for each raw material to each factory • Minimum/maximum consumption for each raw material, in each factory • Minimum/maximum stock for each raw material or raw material group and for each factory
  • 9. Possible constraints for each recipe and period • Minimum/maximum on the incorporation of each raw • Minimum/maximum on the increase/decrease on each raw material with respect to the incorporation of the previous period • Minimum/maximum on the nutritional value of each nutrient • Minimum/maximum on the increase/decrease on each nutrient with respect to its value in the previous period
  • 10. Output for each location (period) Raw material Consumption Stock Formula Price Factory Raw material Purchase Quantity sold Market
  • 11.
  • 12.
  • 13.
  • 14. Optimise decision making : when and how many to buy of each raw material (overview of purchases per period)
  • 15. In the following case studies, we used the following outline: a single market, with a restricted availability for some raw materials per period on the market, purchase prices per factory and per period, limited stock capacity for some raw materials, limited supply capacity for some raw materials and factories, limited capacity to consume some raw materials in some factories,
  • 16. Optimise decision making : when and how many to buy of each raw material (raw material supply and consumption per factory and per per period)
  • 17. Optimise decision making : when and how many to buy of each raw material (logistic constraints)
  • 18. Anticipate on future prices when applying tolerances : optimising without tolerances
  • 19. Accounting for the tolerances on maize (-5%,+5%) when optimising : anticipate on the price decrease in october, therefore a less pronounced decline in summer