8th North America Conference on Industrial Engineering and Operations Management

Cargo Allocation Model by Mixed Integer Linear Programming Approach to Minimize Demurrage Ship Cost

Adhitya Mangala, Maya Puspasari & Nora Nisrina
Publisher: IEOM Society International
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Track: Operations Research
Abstract

All companies must have competitive advantages to survive in this globalization era. Nowadays, the company needs a good priorities and systems, work efficiently, on time, good quality and low costs. The coal mining industry is an industry that is still in great demand by investors because of Indonesia's large coal reserves and Indonesia's strategic location so that the business competition is very tight. In addition, Indonesia is the world's largest coal exporter in 2020 with export volume reaching 405 million tonnes. Ship loading schedule is a major activities that have big impact to company profit and loss such as quality of coal cargo, demurrage ship cost, commercial price and opportunity loss, it is also has impact for the customer satisfaction. This research aims to make cargo allocation optimization model to minimize demurrage ship cost by using mixed integer linear programming. Laytime stop are the decision variable needed to find and software Excel solver is a instrument used for this model. Constraints used for this model are total cargo allocation must be equal to capacity of vessel, cargo allocation per day must be equal or less than loading rate vessel per day, daily inventory is fully used and excess time must be equal or higher than 0. The results show that the demurrage cost decreased 16.47 % compared to manual method. Sensitivity analysis of ship capacity and inventory constraints mostly affects to demurrage cost about $ 0.38644 per 1 ton of increase in ship capacity or decrease in daily inventory.

Published in: 8th North America Conference on Industrial Engineering and Operations Management , Houston, United States of America

Publisher: IEOM Society International
Date of Conference: June 13-15, 2023

ISBN: 979-8-3507-0546-1
ISSN/E-ISSN: 2169-8767