Optimizing the supply chain strategy of a multi-unit Finnish nursery company

Abstract

This paper introduces a capacitated mixed integer programming (CMIP) model for solving an integrated production-distribution system design problem (PDSDP) in the seedling supply chain management (SCM) of a multi-unit Finnish nursery company. The model was originally developed from a strategic perspective in which a company desires to evaluate the expansion or closure of its facilities. Nevertheless, the model is also used for solving operational and tactical level problems by applying applicable constraints. The data were collected from the company studied. The results proved that economies of scale could be exploited in seedling production more than the company does today; Compared to the company's current supply chain strategy with 5 nursery units producing seedlings, when other supply chain strategies were applied the number of nursery units decreased by 2-4 units, and cost savings in the supply chain varied from 11.3% to 21.3%.

Use of MIP for planning temporary immigrant farm labor force

“…Research which is specifically related to the model presented in this article are those which focus on harvesting decisions specifically (Caixeta-Filho, 2006;Allen and Schuster, 2004;Bohle et al, 2010) as well as those focusing on the overall agricultural scheduling methodology (Caixeta-Filho et al, 2002, Hazell, 1971. It should also be noted that mathematical models are found in other areas of the agricultural supply chain as demonstrated by those focusing on distribution (Broekmeulen, 1998;Cholette, 2007;Rantala, 2004), packaging (Blanco et al, 2005;Davis et al, 2002), storage (Starbird, 1988), and the complete production and logistics planning process (Kopanos et al, 2012;Amorim et al, 2012;Yu and Nagurney, 2013). The use of similar models also applies to other agricultural sectors including soybeans (Reis and Leal, 2015), pork (Rodríguez et al, 2014), and sugar cane (Jena and Poggi, 2013).…”

Coordination of perishable crop production using auction mechanisms

“…They do not consider any interactions among agents, but rather assume centralized control by one single planner. Some examples of these models of expanded scope include Widodo et al (2006), Rantala (2004), Kazaz (2004), Kazaz and Webster (2011), Ahumada, Villalobos and Mason (2012), and Ahumada and Villalobos (2009b), whose contributions vary from perishability modeling to plant location and production planning. These models are generally tactical in nature and therefore are of particular relevance to our approach.…”

OR/MS decision support models for the specialty crops industry: a literature review

“…The newly independent Finnish nursery industry was under great pressure from increased importation of seedlings from Sweden during the 1990s. In order to exploit economies of scale achievable by mass production, Rantala (2004) formulated a MIP model for multi-echelon, multi-product, multi-plant supply chain management. He decomposed the planning problem into three levels according to time horizon: operational (short-term), tactical (mid-term), and strategic (long-term).…”