Planning empty container relocations under uncertainty

Abstract

Reusable packaging often accumulates downstream in supply chains, resulting in non-revenue-earning relocations. This paper presents a reliable optimisation model under supply and demand uncertainty. Instead of using deterministic forecasted values, we propose a fixed recourse stochastic program that embeds the approximated uncertainties within the decision model. Results do indeed prove to be more reliable, and thus useful to industry. We also investigate the model's sensitivity to the difference in weighting of inventory versus stock-out penalties. The valuable role of Operations Research in industry - and of optimisation, specifically - is affirmed. Though uncertainties cannot be eradicated, planned relocations can be done more reliably.