Decision Support Systems for Supply Chain Management Chap 10 王仁宏 助理教授 國立中正大學企業管理學系 ©Copyright 2001 製商整合科技中心

Decision Support Systems Some decisions are better made by people: flexibility, intuition, wisdom Some decisions are better made by computers DSS allow computers and people to work together to make better decisions, range from spreadsheets to expert systems. Advanced Planning and Scheduling (APS)

Areas of DSS Demand planning Supply planning: distribution resource planning system (DRP) Manufacturing planning and scheduling

Mathematical Tools of DSS Operations research: developed in World War II Artificial intelligence (AI): intelligent agents Expert systems: a kind of AI, rely on an extensive database of knowledge

DSS Components Input data –Becoming easier to obtain –Quality important - validation Analytical tools –Simulation, AI, optimization, data mining –Heuristics vs. Optimal solutions, bounds Presentation tools –GIS, graphical displays

Analytical Tools Queries Statistical analysis Data mining Online analytical processing (OLAP) tools Calculators Simulation Artificial intelligence Mathematical models and algorithms

Choose Appropriate Analytical Tools The type of problem being considered Required accuracy of the solution Problem Complexity Number and type of quantifiable output measures Required speed of DSS Number of objectives or goals of the decision maker

Applications and Analytical Tools Marketing: Query, statistics, data mining Routing: Heuristics, exact algorithm Production scheduling: simulation, heuristics dispatch rules Logistics network configuration: simulation, heuristics, exact algorithms Mode selection: heuristics, exact algorithm

Presentation Tools Reports Charts Spreadsheet tables Animation Specialized graphic formats: layout Geographic Information System (GIS)

GIS Capabilities Mapping and thematic mapping Database management Interactive data query Spatial data retrieval Geographic data manipulation Spatial data analysis Geocoding: translate addresses into geographic coordinates Geographic data import/export Buffering/polygon overlay

GIS Application Areas Marketing analysis Census and demographic data analysis Real estate Geology Forestry Network analysis Site selection Routing Supply chain management

DSS Evaluation P. 272

Logistics Network Design

DSS Examples Logistics Network Design Supply Chain Planning Vehicle Routing and Scheduling

Logistics Network Design Data: –A listing of all products –Location of customers, existing warehouses and sources –Demand for each product by customer location –Transportation rates –Variable production costs –Warehousing costs –Shipment sizes by product

Logistics Network Design Data (Contd.): –Order patterns by frequency, size, season, product –Order processing costs –Customer service objectives

Logistics Network Design

The Key Issues: –Number of warehouses –Location of each warehouse –Size of each warehouse –Allocation of products to the different warehouses –Allocation of customers to each warehouse

Logistics Network Design The Objective is to balance service level against –production/ purchasing costs, –inventory carrying costs, –facility costs storage, handling, fixed, –transportation costs.

Logistics Network Design

Supply Chain Planning Data: –Information regarding suppliers, manufacturers, warehouses and retail stores. –Forecast demands for each store. –Available transportation modes, transportation costs and inventory costs.

Supply Chain Planning Demand planning Production planning and detailed scheduling Distribution planning

Supply Chain Planning Constraints: –Each store receives its demand. –Warehouse Capacity. –Supplier/ Manufacturer limitations. –Delivery Time. –Service Level. Goal: –Design production and distribution schedules so that no constraint is violated and total cost including manufacturing, inventory and transportation is as small as possible.

Vehicle Routing Data: –A set of vehicles, –demand locations (or customers) where demand is picked up, –depots.

Vehicle Routing

Constraints: –Each demand location is visited and the demand is picked –Vehicle Capacity. –Distance Constraint. –Time Window Constraints: Earliest Pick-up time, Service time, Latest pick-up time.

Vehicle Routing Goal: –Design routes for vehicles such that no constraint is violated and either total length of routes is as small as possible, or number of vehicles is minimized.

Vehicle Routing

DSS: Past Approaches and Limitations Many procedures have been developed. –A common limitation of these procedures is the lack of robustness Lack of inexpensive graphical representation tools for geographic data. Inability to solve large scale problems on desk-top computers.

New Developments Deeper understanding of –the underlying structure of effective strategies for large scale models, –uncertainty issues. Development of new procedures that are –robust –efficient –practical –fast.

New Developments Significant increase in computing power. Development of desk-top Decision Support tools such as Geographic Information Systems (GIS).

Geographic Information Systems (GIS) Definition: A GIS is an integrated computer mapping and database management system that provides functions for the storage, retrieval, management, analysis and display of geographic data.

Typical GIS Capabilities Mapping Database management Geographic Data Retrieval Geographic Data Manipulation Geographic Data Analysis

Typical GIS Interface

Typical GIS Applications Census and Demographic Data Analysis Market Analysis Land Use/ Parcel Mapping Network Analysis –Transportation, –Telecommunications Site Location Modeling Distribution, Logistics and Supply-Chain Management.

Benefits of Integrating GIS with Optimization Development of Model Input Visualization of Data Provides Accurate Street Level Data Base –One Way Streets –Turn Difficulties Visualization of Strategies Generated by the Procedure

Benefits of Integrating GIS with Optimization Incorporate Travel Time Estimation Model Evaluation Interactive Decision Support System.

Table 1:Software Vendors/Logistics

A Step Back: Information Technology Internal and external systems connecting the parts of the firm to each other, customers and suppliers Companies employ various systems: –Decision support systems –Warehouse management systems –Production planning and tracking –Transaction and sales processing –Communications systems: , Intranets

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