Fall 2007 Seminar Series

DATE: October 25
LOCATION: E40-298
TIME: 4:15pm
Reception immediately following in the ORC ConferenceRoom, E40-106

SPEAKER:
Jorge Vera

TITLE
Robust Optimization Applied to Supply Chain Problems in the Forest Industry

ABSTRACT
Decision Support Systems based on optimization models have long been used to support decision making in Supply Chain Management. In particular, the forest industry has been particularly active in the use of Optimization models to support its operations. Two specific application are the planning of harvesting operations, in which decisions have to be made regarding harvesting, machinery use and transportation to pulp plants and saw mills, and the planning of saw mill operations. In both cases, yield coefficients used in these models are only an approximation given the natural variability of the raw material, as well as process irregularities. If decisions are made based on the estimated average values, there is a risk that demand might not be met with the right products. Robust Optimization is an attractive methodology to cope with this situation and in this talk we present robust formulations of these forest planning problems. We show computationalresults for some real cases and show how to use the models to assess the tradeoff between the robustness requirements and the deterioration in the objective function. We also show how we have evaluated the expected feasibility of robust solutions by means of simulation.