PhD Defence: Green Lot-Sizing

The PhD dissertation Green Lot-Sizing by Mathijn Retel Helmrich approaches the problem of factoring in expensive environmental concerns in production planning mathematically.

When manufacturers make production and inventory decisions, minimising costs is often the most important, or even the only consideration. Taking the effects on the environment into account is usually not only expensive, but also makes the decisions much more complicated. The mathematical insights in this dissertation can help manufacturers to reduce their environmental impact, and do so in the most cost-effective way.

 Retel Helmrich’s calculations show how manufacturers could make production greener by incorporating the remanufacturing of used products in production decisions, imposing a maximum on the emissions of pollutants (such as carbon dioxide) during production and avoiding frequent shipments by almost empty vehicles.

 The new directions that Mathijn takes the classical lot-sizing model in will be interesting for manufacturers, but importantly also for providers of Manufacturing Resource Planning (MRP), a part of Enterprise Resource Planning (ERP). His work allows ERP providers to offer manufacturers products that can accommodate their environmental policy cost-effectively. 

Mathijn Retel Helmrich defended his dissertation on Thursday, 3 October 2013. His supervisor was <link people albert-wagelmans>Albert Wagelmans, Professor of Econometrics at Erasmus University Rotterdam and his co-supervisors were <link people wilco-van-den-heuvel>Wilco van den Heuvel, Associate Professor at Erasmus University, and Raf Jans, Associate Professor at HEC Montreal. Other members of the Doctoral Committee were Professor Stephane Dauzere-Peres of the Ecole National des Mines de Saint Etienne, and Professor <link people rommert-dekker>Rommert Dekker and Professor <link people steef-van-de-velde>Steef van de Velde of Erasmus University.

About Mathijn Retel Helmrich

<link people mathijn-jan-retel-helmrich>Mathijn J. Retel Helmrich (1984) received his bachelor’s and master’s degrees from Erasmus University Rotterdam, in econometrics and management science, with a specialisation in quantitative logistics and operational research. In 2007, he started his Ph. D. research at the Econometric Institute at Erasmus University Rotterdam on the NWO-funded project ‘Models and solution approaches for complex production planning and scheduling problems’. He visited HEC Montréal from May to July 2009.

His main research interest is operational research, in particular problems related to reverse logistics and sustainable operations, such as optimisation methods for production planning with environmental considerations, and product reuse in innovative environments. He has presented his work at various conferences, such as EURO in Lisbon, and the International Workshops on Lot-Sizing in Gardanne, Istanbul and Rotterdam. A paper on which the second chapter of his dissertation is based, has been accepted for publication in IIE Transactions. A paper on which the third chapter is based, is currently under review at the European Journal of Operational Research. He has also conducted research on optimisation in public transport, which has been published in Transportation Research Part B: Methodological. 

Currently, he is a postdoctoral researcher at the Desautels Faculty of Management at McGill University in Montréal.

Abstract of Green Lot-Sizing

The lot-sizing problem concerns a manufacturer that needs to solve a production planning problem. The producer must decide at which points in time to set up a production process, and when he/she does, how much to produce. There is a trade-off between inventory costs and costs associated with setting up the production process at some point in time. Traditionally, the lot-sizing model focuses solely on cost minimisation. However, production decisions also affect the environment in many ways. In this dissertation, the classic lot-sizing model is extended into several different directions, in order to take various environmental considerations into account.

First, items that are returned from customers are included in the lot-sizing problem, within the context of reverse logistics. These items can be remanufactured to fulfil customer demand. In another extension, a minimum is imposed on the size of a production batch, in order to reduce the pollution associated with producing many small batches. Furthermore, a lot size model is considered in which there is a maximum on the amount of pollutants, such as carbon dioxide. This model can also be seen as a bi-objective lot-sizing problem. The mathematical models that arise from these extensions are fundamentally harder to solve than the classic lot-sizing problem. Several approaches to solving these problems are developed, based on mathematical optimisation techniques such as mixed integer programming, dynamic programming and fully polynomial time approximation schemes.

Photos: Chris Gorzeman / Capital Images