An integrated optimization model for managing the global value chain of a chemical commodities manufacturer

M Kannegiesser () and Günther H-O
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M Kannegiesser: Technical University of Berlin
Günther H-O: Technical University of Berlin

Journal of the Operational Research Society, 2011, vol. 62, issue 4, 711-721

Abstract: Abstract The realization of supply chain management concepts goes along with the introduction of comprehensive software systems for supporting decisions at the strategic, tactical, and operational planning level. Moreover, in industry the focus has shifted from a pure logistics-oriented view towards the integration of pricing and revenue issues into cross-functional value chain planning models. This paper presents a practical decision support tool for global value chain planning in the production of chemical commodities. The proposed linear optimization model consists of various modules that reflect sales, distribution, production, and procurement activities within a company-internal value chain. The objective of the model is to maximize profit by coordinating all activities within the supply chain. The model formulation is related to a real industry case. It is shown how the model can be used to support decision making from sales to procurement by volume and value.

Keywords: value chain management; commodity business; linear optimization model; chemical industry (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1057/jors.2010.18

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