Coordination between strategic forest management and tactical logistic and production planning in the forestry supply chain

Abstract

In this paper, we study the coordination mechanism in the forestry supply chain between strategic forest management and tactical production planning. We first formulate an integrated model to establish a theoretical benchmark for performance of the entire supply chain. It is a mixed integer programming model that involves harvesting, bucking, transportation, production, and sales decisions for both tactical and strategic planning levels. We then present two sequential approaches S-A and S-B where the coordination is done through internal pricing. S-A is the approach currently used in practice where harvesting in the forest is the main driver of the supply chain activities and internal pricing is introduced to control bucking decision in a separate stage. In contrast, S-B takes downstream demand information into consideration and internal pricing directly influences harvesting decision in the first stage. In order to find the appropriate setting of internal pricing that leads to the system optimum, we suggest two heuristics H-I and H-II. The internal pricing in H-I is based on dual values and in H-II, it is derived from a Lagrangian decomposition. A real-life case study in the Chilean forestry industry is used to compare the results of different approaches. It is shown that the new sequential approach S-B generates as good feasible solution as that obtained from the integrated approach but in much less time. Both heuristics H-I and H-II bring about near-optimal feasible solutions. H-II also provides optimistic bound of the optimal objective function value, which can be used as a measure of the solution quality.

A framework for quantitatively assessing the repurpose potential of existing industrial facilities as a biorefinery

“…In biomass supply chain planning, decisions at the strategic level include selecting potential facility locations and sizes, product and market development, and selecting the conversion technology . Tactical level planning reflects a medium‐short‐term decision horizon, and includes final selection of a facility and decisions on how to best address production and distribution issues . Operational level planning occurs through day‐to‐day decisions, including contracts with suppliers and buyers for feedstock and fuel, respectively .…”

“…Tactical level planning reflects a medium‐short‐term decision horizon, and includes final selection of a facility and decisions on how to best address production and distribution issues . Operational level planning occurs through day‐to‐day decisions, including contracts with suppliers and buyers for feedstock and fuel, respectively . This research is presented at the strategic level to aid in identifying candidate facilities best suited for repurposing based on compatibility with a given conversion process.…”

Mobilizing and Managing Public Forestry Revenue

“…Figure 2.1 shows the intersection of this simplified supply chain with compliance and revenue systems. Kong and Rönnqvist (2014), and others. 11 These rules revolve around the ecology of the involved species, site conditions, and other natural factors; market demand; and various other considerations.…”

Theoretical Analysis on the Pricing and Advertising Coordination of Multi Retailer Supply Chain from the Perspectives of Common Interest Maximization

“…However, to realize the management goal of the first important step is: core enterprise must choose from a large number of suppliers in a number of the excellent supplier and to establish a long-term, stable relation of cooperation. The core of supply chain management and the key is to establish and maintain the partnership between enterprises, for some of core enterprise in supply chain, to choose the appropriate enterprise as a partner is crucial [17][18].…”