A « Stochastic » Linear Program for The Tunisian Olive Oil Supply Chain Hatem Masri & Hanen Hamza...
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Transcript of A « Stochastic » Linear Program for The Tunisian Olive Oil Supply Chain Hatem Masri & Hanen Hamza...
A « Stochastic » Linear Program for The Tunisian
Olive Oil Supply Chain
Hatem Masri&
Hanen Hamza
QM350: Operations ResearchQM350: Operations Research
University of Bahrain
Introduction Supply Chain Management
Agricultural supply chain
Tunisian olive oil
The structure of olive oil sector in Tunisia
Objective of the study: Planning activities of the oil mill
OLIVE TREESCULTIVATION
HARVESTINGOLIVES
TRANSPORT OLIVES
TO THE OIL MILLS
Transportationand Storage of
olives
CONTROL OF THE QUALITY OF THE OLIVES
Weighing, Washing,
Leaves removal
EXTRACTION OF OLIVE OIL
1.The classical system 2.The pressure system
3.The Continuous process with 3 phase decanters4.The Continuous process with 2 phase decanters.
THE SOLID-LIQUIDSEPARATION PROCESS
BY PRESSURE OR CENTRIFUGATION
OLIVE OILSTORAGE
OLIVE OILCONDITIONING
DISTRIBUTION OF OLIVE OIL
OLIVE OIL SUPPLY CHAIN
CRUSHING THE OLIVES WITH PITS
MIXING OLIVES AND PITS TO CREATE
OLIVE PASTE
LIQUID-LIQUIDSEPARATION PROCESS BY
DECANTATION AND CENTRIFUGATION
Surface: 1.6 million hectares, 35% of cultivable lands
57% of total agricultural farm labour.
Oil mills: 1600 unitsCS: 840, PS: 318, CP:320, MS: 111
Triturating capacity 31745 tons/ DayThe storage capacity: 300 thousand tons
The total production of olive oils173 thousand tons
National Office of Oil (NOO)(70% of the production)
Private exporters (21% of the production)
Conditioning units(9% of the production)
External market 66,5% of the production
Interiors Market +stock 33,5% of the production
Tunisian Tunisian Olive Oil Olive Oil SectorSector
The classical system (CS) The pressure system (PS) The continuous process (CP) The mixed system (MS)
Problems Of the Tunisian Olive Oil Supply chain (1)
The Problems Of Olive Harvest: Lack of specialized labor increases the
harvesting duration (till may) and the beating down damage olives
Climate scarce and irregular rains
Mechanical harvesting of olives will be essential in order to reduce the time of harvest according to the size of the Tunisian olive tree and so avoid the problem caused by the shortage in labor.
Problems Of the Tunisian Olive Oil Supply chain (2)
Problems Of Olive Oil Production: The increase in the olive oil production cost Price of olive is unstable. Quality of Olives Storage capacity of olives and olive oil Regression to the position of Tunisian olive oil on
the world market.
Encourage investment on olive oil mills to increase the extraction capacity of olive oil.
Create a label of quality for the Tunisian olive oil.
Problems Of the Tunisian Olive Oil Supply chain (3)
Problems Of Olive Oil Distribution About 90% of Tunisian olive oil exports are in
a bulk. Traditional Market: 87% of Tunisian olive oil
exports are to Italy and Spain. Low Competition Capacity of the Tunisian
Exporters. Internal Market Supply chain is not Optimized
Optimize the olive oil production chain
The Olives
U1
Um
Mm
UuThe units
PpThe olive oils
Demand
tmtmPR ,,
tmtmPR ,,
tmtmtmtmuUu
PRRPRRPRUP ,1,,,,
ttm SOPRR ,
tmutmu OUUP ,,,
tmutmu OUUP,,,
1,1,1,, mmmuUu
PRRPRUP
utTt
FDTCARDOU
)(
t,m,um,p,ut,p,u UPEP
tptpuUu
DEP ,,,
~
Model Constraints
The Recourse Approach
)w(D)w(YEP it,pit,pt,p,uUu
tptpuUu
DEP ,,,
~
where is the quantity of shortage on demand
)w(Y it,p
Empirical Study: RUSPINA RUSPINA was created after the liberalization
of the olive oil sector in Tunisia. Major player in the olive oil sector and
especially in the export of the virgin olive oil to the United States and Europe.
Uncertainty on the demand from national and international olive oil markets
RUSPINA has to plan its production during the olive oil production period (4 months from November to the end of February) to satisfy the random demand.
RUSPINA Production Chain RUSPINA has two olive oil production units with a
continuous process. The first unit uses a three-phase decanter and the second a two-phase decanter.
The company can increase the production by using two additional units, the first with a traditional system and the second with a pressure system
Storage capacity is equal to 5000 Kg of olives The company produces 4 types of olive oil: extra-
virgin olive oil, fine virgin olive oil, semi-fine virgin olive oil and lampante oil
Olives In the local market, there are seven varieties of
olives, namely Chemlali, Chemchali, Chetoui, Oueslati, Zalmati, Sayali and Gerboui
To reduce the size of the study, we limit ourselves to three scenarios: Weak production of olive oil. Medium production of olive oil. High production of olive oil.
Opimization Solver Using data collected from RUSPINA, we solved the
linear program using LINGO 9 optimization solver. The optimal solution values give the company more than 12% additional profits.
The traditional system has never been used along the production period (120 days).
Units of trituration Number of days used
Traditional 0
Pressing 40
Three-phases decanters 97
Two-phases decanters 80
Conclusion and Perspectives Tunisian olive oil sector:
the non efficiency of traditional production units compared to other production units.
the importance of some olive varieties as the chemchali and sayali varieties that we must encourage farmers to plant olive trees from these two varieties
RUSPINA needs to Increase its storage capacity of olives oil and, therefore,
makes profit from an expected low price of olive oil; Sign production contract with farmers to purchase olives
from the two varieties chemchali and sayali; Look for a new production unit with three-phase
decanters to ameliorate the trituration capacity.