- For a given item cost, cost-to-order, holding cost at a warehouse, lead time, order target (desired amount of items to keep in a warehouse), and order cutoff (minimal amount below which we issue a new order), expected inventory and budget over the next 7 days is shown.
- Optimization procedure finds the best policy (Order target, Order cutoff) that maximizes the budget over 7 days.
Single warehouse supply simulation.
Actual optimization problems can be more complicated, and include a multi-echelon supply chain, described in Supply Chain". More sophisitcated optimization methods are required in this case. Please let us know if this applies to you. We would be happy to help!
- This approach allows us to solve a couple of transportation problems. For example, we may want to minimize the costs of shipping goods from factories to customers, while not exceeding the supply available from each factory and meeting the demand of each customer.
- In the other example, we may choose to store produced goods in intermediate warehouses. Provided that we know the warehouse capacities, customer demands, and shipping costs, we can optimize the overall transportation schedule to minimize costs.
Example of optimization for a transportation problem.
Real-life logistics problems can be more complex, and include, for instance, multiple commodities and limited-size vehicles, as described in Logitics. We would be glad to consider your specific problem and help you solve it.
