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See detailPayload-based fleet optimization for rail cars in the chemical industry
Kallrath, J.; Klosterhalfen, Steffen UL; Walter, M. et al

in European Journal of Operational Research (2017), 259(1), 113-129

Rail car fleets are significant investments in the chemical industry. Therefore, chemical companies constantly try to optimize the fleets as part of major working capital optimization initiatives. We ... [more ▼]

Rail car fleets are significant investments in the chemical industry. Therefore, chemical companies constantly try to optimize the fleets as part of major working capital optimization initiatives. We study a complex rail car fleet optimization problem observed at BASF and an approach to tackle the problem in a sequential way. We develop a mixed integer non-linear programming model to derive suggestions to the questions: (i) How many different rail car sizes in terms of volume are appropriate and what are their optimal volumes? and (ii) For each volume, what is the optimal number of rail cars of this size? The model formulation takes into account various real-world restrictions concerning the volume and weight of the rail cars as well as the tracks that they run on. We propose two solution methods. First, we reformulate the non-linear terms, which results in a mixed integer linear programming (MILP) model. This model can be solved in a reasonable amount of time, if the number of different rail car sizes is small (2 or 3). Second, we develop a two-step approach that uses an enumeration scheme in the first stage to find good initial solutions that are fed into the MILP formulation in the second stage. This approach solves the model for larger numbers of different rail car sizes (4 or 5). Through the fleet redesign BASF has realized cost savings of nearly 2 million euros so far. [less ▲]

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See detailRail Car Fleet Design: Optimization of Structure and Size
Klosterhalfen, Steffen UL; Kallrath, J.; Fischer, G.

in International Journal of Production Economics (2014), 157

We develop a model to determine the optimal structure and size of a rail car fleet at a chemical company under uncertainty in demand and travel times as well as substitution between rail car types. First ... [more ▼]

We develop a model to determine the optimal structure and size of a rail car fleet at a chemical company under uncertainty in demand and travel times as well as substitution between rail car types. First, we formulate an MILP model that accounts for the substitution relations between the types and minimizes the total direct rail car cost under given rail car availability constraints and a predefined maximum number of types. Second, based on the fleet structure obtained by the MILP model, the fleet size is computed by using an approximation from inventory theory that considers the existing uncertainties. Compared to the current approach of the rail car fleet management team, the model produces a reduction in safety stock of 120 rail cars and thus direct cost savings of 8% as well as further indirect cost savings due to a smaller number of rail car types, which reduces the switching effort of the rail cars on the storage tracks. [less ▲]

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