Optimization of fertilizer supply chain

• Online Access: http://hdl.handle.net/2047/D20321215

Fertilizer aid is an important part of food relief support by international humanitarian organizations, for countries whose economy relies heavily on agriculture as a source of income. The target country of this paper is still facing pressing crops undernourishment problems and there is wide room for improvement of the current inland fertilizer supply chain with consistent increasing demand of imported fertilizer. The target country imports fertilizer to two major target segments: farmers' unions and regions without unions, and the former is distributed directly from import ports and the latter is distributed through transshipment hubs. The fertilizer supply chain distribution process consists of importing, routing, loading, discharge, and storage. Currently, the supply chain of the target country has transportation inefficiency, especially the demurrage issue, which limits the demand getting fully satisfied. Meanwhile the country has difficulty in quantifying the influence on total cost under different supply plans, different usage of ports and hubs, and delivery delay. After identifying the problems, this paper develops a Multi-Period Minimum Cost Network Flow (MCNF) model, integrating every part of the supply chain, in order to minimize the total cost of the fertilizer supply chain. Besides the paper builds a Max Flow model to detect the capacity bottlenecks, designs a mixed comparison experiments to provide the influence of different supply plans. The output of the model, the optimal solution with minimal operational cost, provides a thorough daily logistic schedule for fertilizer distribution.