References of "Klosterhalfen, Steffen 50025041"
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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 detailOperations Research in BASF's Supply Chain Operations
Blackburn, Robert; Kallrath, Josef; Klosterhalfen, Steffen UL

in International Transactions in Operational Research (2015), 22

In this paper, we highlight the application of operations research (OR) at BASF in the area of supply chain management (SCM) by using selected examples with annual cost savings ranging between several ... [more ▼]

In this paper, we highlight the application of operations research (OR) at BASF in the area of supply chain management (SCM) by using selected examples with annual cost savings ranging between several hundred thousand and several million euros. We address special characteristics of the process industry that should be dealt with and identify future research needs. The examples cover strategic, tactical, and operational topics encountered at BASF. We share our lessons learned, based on our experience from past OR projects in SCM, about challenges as well as benefits of standard and tailor-made OR solutions. In general, we find that the special characteristics often call for a modification or enhancement of standard OR models. Providing appropriate solutions therefore requires a joint effort of SCM, IT, and OR experts. [less ▲]

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See detailStrategic Safety Stock Placement in Supply Networks with Static Dual Supply
Klosterhalfen, Steffen UL; Minner, Stefan; Willems, Sean

in Manufacturing and Service Operations Management (2014), 16(2), 204-219

Many real-world supply networks source required materials from multiple suppliers. Existing multiechelon inventory optimization approaches either restrict their scope to multiple supply sources in two ... [more ▼]

Many real-world supply networks source required materials from multiple suppliers. Existing multiechelon inventory optimization approaches either restrict their scope to multiple supply sources in two-echelon systems or single suppliers in multiechelon systems. We develop an exact mathematical model for static dual supply in a general acyclic N-echelon network structure, which builds on the guaranteed-service framework for safety stock optimization. It is assumed that the suppliers are allocated static fractions of demand. We prove that for normally distributed demand an extreme point property holds. We present a real example from the industrial electronics industry consisting of five echelons and three dual-sourced materials. This example forms the basis for a numerical analysis. Compared with the only previously published approximate solution, our exact approach results in considerable cost savings because the exact model captures inventory pooling in a way that the approximation is unable to do. For a set of test problems, total safety stock cost savings are 9.1%, on average. [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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See detailAn Integrated Guaranteed- and Stochastic-Service Approach to Inventory Optimization in Supply Chains
Klosterhalfen, Steffen UL; Dittmar, Daniel; Minner, Stefan

in European Journal of Operational Research (2013), 231

Multi-echelon inventory optimization literature distinguishes stochastic- (SS) and guaranteed-service (GS) approaches as mutually exclusive frameworks. While the GS approach considers flexibility measures ... [more ▼]

Multi-echelon inventory optimization literature distinguishes stochastic- (SS) and guaranteed-service (GS) approaches as mutually exclusive frameworks. While the GS approach considers flexibility measures at the stages to deal with stockouts, the SS approach only relies on safety stock. Within a supply chain, flexibility levels might differ between stages rendering them appropriate candidates for one approach or the other. The existing approaches, however, require the selection of a single framework for the entire supply chain instead of a stage-wise choice. We develop an integrated hybrid-service (HS) approach which endogenously determines the overall cost-optimal approach for each stage and computes the required inventory levels. We present a dynamic programming optimization algorithm for serial supply chains that partitions the entire system into subchains of different types. From a numerical study we find that, besides implicitly choosing the better of the two pure frameworks, whose cost differences can be considerable, the HS approach enables additional pipeline and on-hand stock cost savings. We further identify drivers for the preferability of the HS approach. [less ▲]

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See detailA Comparison of the Constant-Order and Dual-Index Policy for Dual Sourcing
Klosterhalfen, Steffen UL; Kiesmüller, Gudrun; Minner, Stefan

in International Journal of Production Economics (2011), 133(1), 302-311

We analyze a single-product, periodic-review, stochastic demand inventory model with backorders and two supply options, a regular and a more expensive expedited one, with deterministic, offsetting lead ... [more ▼]

We analyze a single-product, periodic-review, stochastic demand inventory model with backorders and two supply options, a regular and a more expensive expedited one, with deterministic, offsetting lead times. Since the optimal policy for such a problem is generally unknown, several simpler policies have been proposed in the literature, e.g., the single-index (SIP), dual-index (DIP), or constant-order policy (COP). In previous research the DIP has been found to perform closely to the optimal policy in specific numerical settings. The COP, on the other hand, is very appealing from a practical point of view. We explore the relative cost performance of these two policies in a numerical study to gain insights into appropriate policy choices. We find that in settings, where dual sourcing is most valuable, the simpler COP delivers satisfactory results, sometimes even better ones than the DIP, and therefore represents a legitimate policy alternative for practical situations. [less ▲]

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See detailSafety Stock Optimisation in Distribution Systems: A Comparison of Two Competing Approaches
Klosterhalfen, Steffen UL; Minner, Stefan

in International Journal of Logistics Research and Applications (2010), 13(2), 99-120

Contributions to multi-echelon safety stock optimisation can broadly be divided into models following either a stochastic- or guaranteed-service approach. These approaches form the basis of several ... [more ▼]

Contributions to multi-echelon safety stock optimisation can broadly be divided into models following either a stochastic- or guaranteed-service approach. These approaches form the basis of several commercial inventory optimisation software tools. To date, there is still a lack of a detailed comparison between the two approaches. This paper presents a cost comparison for two-stage distribution systems by means of a simulation study. The results indicate that the cost difference between the two approaches is quite small amounting to 4 at most. We observe that in most cases, the resulting (lower) internal warehouse service level is a good indicator for the superiority of an approach. The guaranteed-service approach shows a better performance for moderate flexibility costs, large warehouse processing times and high retailer service levels. [less ▲]

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