Integration of Production Planning and Scheduling in the Chemical Industry

Abstract

To remain competitive in today’s environment, chemical companies must adopt an integrated view across all their operations and use advanced planning methods to achieve enterprise-wide optimality. At the production level, it is necessary to simultaneously consider medium-term (planning) and short-term (scheduling) decisions. Despite recent advances in computer hardware and optimization software, current methods are insufficient to address real-world instances of this integrated problem. Three approaches to this integrated problem are discussed. First, a novel formulation for the “generalized” lot-sizing problem is presented. This formulation accounts for process characteristics that are common in the chemical industry but are not addressed by existing approaches. Second, a number of theoretical results for discrete-time formulations are developed, enabling us to formulate problems that can be solved very effectively. Third, we present how detailed scheduling models can be used off-line to obtain an approximation of feasible production levels and an underestimation of production cost. Finally, we present how these methods can be used to address large-scale integrated planning-scheduling problems.