E. Kutanoğlu; "Integrated Logistic Network Design...", June 3, 13:30
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  • E. Kutanoğlu; "Integrated Logistic Network Design...", June 3, 13:30

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 Faculty of Engineering and Natural Sciences


OPIM-MS Joint Research Seminar  Announcement



Integrated Logistics Network Design and Inventory Stocking with Time-based Service Levels for Low Demand Items*



Erhan Kutanoglu, The University of Texas at Austin



We model, analyze and develop solution techniques for an integrated network design problem that simultaneously makes both location/allocation and inventory stocking decisions. The motivation for this problem is post-sales service parts logistics (SPL) in which multiple parts are used to repair multiple products that are in use at geographically dispersed customers. The mathematical model captures important features of real SPL systems: (1) multiple multi-part products with part commonality across products, (2) system-wide, product-level, time-based

service requirements, and (3) stochastic demand satisfied by facilities operating with one-for-one replenishment inventory policy. A critical component of the model is the time-based service levels which are functions of both (1) distances between located facilities and customers, and (2) part availabilities (fill rates) of parts, which in turn are functions of stock levels and demand allocations that are being decided as part of the model. In addition to

capturing this intricate relationship, our model effectively considers varying fill rates of different parts stocked at various facilities to achieve an overall service level for a product, thus allowing optimal allocation of system-wide product-level service requirements across facilities and parts. We use a variable substitution scheme to develop an equivalent convex model for the originally nonconvex problem, and then use outer-approximation to linearize the convex model. We propose exact solution techniques based on the linearized model, and devise computationally less demanding lower and upper bounding methods. Our results from extensive computational experiments on variety of problem instances based on real-life industrial data show the effectiveness of the overall approach.



Erhan Kutanoglu is an Associate Professor in the Operations Research and Industrial Engineering Graduate Program in the Department of Mechanical Engineering at The University of Texas at Austin. Before his current position, he worked as Operations Research Analyst and Development Engineer at IBM Global Services, and taught at the University of Arkansas. He received his Ph.D. in Industrial Engineering at Lehigh University, and his M.S. and B.S. degrees, both in IE, at Bilkent University, Turkey. His research interests include large-scale optimization and scalable, distributed, and game-theoretic models and algorithms with applications to scheduling, inventory, logistics network design, and supply chain problems. His current industrial focus is post-sales service parts logistics and semiconductor manufacturing. His research has been supported by agencies such as National Science Foundation, and corporations such as IBM, AMD, and Freescale Semiconductor. He is a 2002 recipient of the NSF Faculty Early Career Development (CAREER) Award. He is a member of IIE and INFORMS.

  • Joint work with Vishv Jeet, M. Ferhat Candas, Ilyas Iyoob, and Amit Partani.


June 3, 2009 Wednesday 13:30-15:00, FMAN 1073