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Integration of Operational Research and Environmental Management Promotoren: Dr Integration of Operational Research and Environmental Management Promotoren: dr. L. Hordijk Bijzonder Hoogleraar in de Milieusysteemanalyse dr. P. van Beek Hoogleraar in de Operationele Analyse dr.ir. L.N. Van Wassenhove Hoogleraar in de Operationele Analyse en Operationeel Management European Institute of Business Administration (iNSEAD), Fontainebleau, Frankrijk Mlyoito', w* Jacqueline Maria Bloemhof-Ruwaard Integration of Operational Research and Environmental Management Proefschrift ter verkrijging van de graad van doctor in de landbouw- en milieuwetenschappen op gezag van de rector magnificus, dr. CM. Karssen, in het openbaar te verdedigen op maandag 3 juni 1996 des namiddags te vier uur in de Aula van de Landbouwuniversiteit te Wageningen. gzsjicj Abstract The subject of this thesis is the integration of Operational Research and Environmen­ tal Management. Both sciences play an important role in the research of environmental issues. Part I describes a framework for the interactions between Operational Research and Environmental Management. The framework describes three levels of incorporating environmental issues in economic decision making: waste management, recovery manage­ ment and preventive management, as well as three types of policy approaches towards environmental problems: local orientation, regional orientation and global orientation. This classification helps to find possibilities of including environmental issues in existing Operational Research models and methods and to find possibilities to use Operational Research models and methods in solving environmental problems. Part II contains three examples of dealing with environmental issues in Operational Research models: waste disposal in a location model, manure utilization in a farm management model and an environmental extension of a blending model. Part III contains two examples of using Operational Research models and methods in environmental management: a linear pro­ gramming model for the mineral excess problem in the Netherlands and a network flow model for paper recycling in Europe. The final chapter confronts the general ideas from the framework with the knowledge obtained from Part II and III. CIP-GEGEVENS KONINKLIJKE BIBLIOTHEEK, DEN HAAG ISBN 90-5485-547-9 ©1996, J.M. Bloemhof-Ruwaard BIBUOTHEEX LAND0OUWUNlVERSZTS«f WAGEM*TGEN jJM'JftTo',20 TB STELLINGEN (I) Operationele Research is een geschikt instrument voor milieubeleid (Environmental Man­ agement). Voorwaarde hierbij is wel dat het aspect van de interdisciplinariteit, kenmer- kend voor de beginjaren van Operationele Research, weer hoge prioriteit krijgt. (Dit proefschrift) (II) De 'keten' benadering van milieuproblemen - van de wieg tot het graf - valt samen met de opkomst van de 'integrale ketenbenadering' binnen de Operationele Research. Deze samenloop van omstandigheden biedt een niet te missen mogelijkheid voor samenwerking tussen beide vakgebieden. (Dit proefschrift) (HI) Het fractioneel programmeringsprobleem maXj;€[/)U]f(x) := jyj, met de vectoren d en q strikt positief, kan optimaal opgelost worden via het zgn. threshold-algoritme. (Dit proefschrift) (IV) De combinatie van een multicriteria methode, een levenscyclus analyse en een optimali- seringsmethode lijkt een zeer geschikt instrument voor het ontwikkelen van produkten die zowel goedkoop moeten zijn als aan een 'groen profiel' moeten voldoen. (Dit proefschrift) (V) Het bedrijfsleven kan Operationele Research modellen gebruiken om de gevolgen van slecht doordachte en weinig effectieve wetgeving kenbaar te maken. (Dit proefschrift) (VI) In onze huidige consumptie-cultuur is er geen sprake van rentmeesterschap, aangezien wij niet alleen van de rente leven, maar ook van het kapitaal. (VII) De airmiles-aktie werkt overconsumptie van vliegreizen in de hand. Uit milieu-overwe- gingen zou deze aktie dus niet gebruikt moeten worden door bedrijven die pretenderen milieu-vriendelijk te zijn. (VIII) Alsmilieubelei d gericht iso p maatregelen die het gedrag van mensennie t wezenlijk veran- deren, zal de consument met een gerust geweten de auto blijven gebruiken na de groene en grijze afvalbak op de voor hen bestemde plek te hebben neergezet. (IX) Sperziebonen uit Thailand worden in Nederland nog steeds verkocht ondanks het feit dat uiteindelijk 170 keer zoveel energie is verbruikt dan bijvoorbeeld bij een Belgische boon. Het wordt tijd om energie-kosten volledigi n de kostprijs van produkten te laten meetellen. (Bron: Kramer, K.J., W. Biesiot, R. Kok, H.C. Wilting, en A.J.M. Schoot Uiterkamp (1994), Energie geld(t),Mogelijke energiebesparingen ophuishoudelijke uitgaven, IVEM Onderzoeksrap- port 71, Rijksuniversiteit Groningen.) (X) Nederlandse garnalen worden naar Marocco vervoerd om gepeld te worden, waarna ze in Nederland verkocht worden. Deze situatie geeft aan dat het transport van goederen een essentieel onderdeel van een eco-keurmerk moet worden. (XI) De wiskundige operatie 'delen' heeft in het spraakgebruik geen eenduidig gevolg, immers: gedeelde vreugd is dubbele vreugd, maar gedeelde smart is halve smart. (XII) Het hebben van vaste rustpunten in het ritme van de tijd is een universele menselijke behoefte om zich houvast te geven. Daarom dient dezondagsrus t gehandhaafd te blijven. J.M. Bloemhof-Ruwaard INTEGRATION OF OPERATIONAL RESEARCH AND ENVIRONMENTAL MANAGEMENT Wageningen, 3juni 1996 Acknowledgements During the time I worked on this thesis I have received support of many people, who I kindly acknowledge. I thank Paul van Beek, Leen Hordijk and Luk Van Wassenhove for their interest in jointly supervising a Ph.D. project on Operational Research and the environment. I could always count on them for advice, suggestions, new subjects and moral support. I enjoyed working together with Eligius Hendrix, Eric Koudijs, Jan-Cees Vis, Mark Sa­ lomon, Landis Gabel and Paul Weaver. Our cooperation resulted in the co-authorship of a number of articles. The computational results in Chapter 6 would have been difficult to obtain without the support from the Landbouw-Economisch Instituut (LEI-DLO). I acknowledge the financial support of Unilever, the Rijksinstituut voor Volksgezondheid en Milieuhygiene (RIVM), and the European Institute of Business Administration (IN- SEAD). NWO supported financially my attendance at international conferences in Lisbon, Boston, and Jerusalem. Due to my colleagues, the Center for Environment and Climate Studies has always been a pleasant environment to work. Many coffeebreaks and lunch-walks helped to feel at home (although home was still 80 kilometers away). Finally, I mention the encouragement and understanding that I have always received from my family and friends. I thank them all, in particular Gerrit, for not having our car all these years, for cooking while I couldn't stop working and discussing my work during dinner and late evenings, and Jesse, for joining me every minute during the 'pregnant' period of writing this thesis and for changing our lives completely. Ackn owledgemen ts Contents I Operational Research and Environmental Man­ agement: a challenge 1 1 Introduction 3 1.1 Subject of the thesis 3 1.2 Purpose of the thesis 4 1.3 Outline of the thesis 6 2 Interactions between OR and Environmental Management 9 2.1 Introduction 9 2.2 OR and Environmental Management 10 2.2.1 Internalization 11 2.2.2 Scope 11 2.2.3 Framework 12 2.3 Green supply chain management 13 2.4 Integration of environmental issues in supply chain modelling 15 2.4.1 Waste management 16 2.4.2 Recovery management 17 2.4.3 Preventive management 19 2.5 Environmental policy 19 2.6 Integration of Operational Research in Environmental Management .... 22 2.6.1 Local orientation r ...... 23 2.6.2 Regional orientation 24 2.6.3 Global orientation 25 2.7 Conclusions 27 II Environmental issues in Operational Research applications: some illustrative examples 31 3 Product and by-product flows 33 3.1 Introduction 34 3.1.1 Problem description 34 3.1.2 Contents 35 3.2 Problem formulations 36 3.3 The two-level facility location model 39 3.4 Lower bounds for the uncapacitated location model 40 3.5 Upper bounds for the uncapacitated location model 42 Contents 3.5.1 Linear programming round-off heuristic 43 3.5.2 Sequential facility location heuristic 43 3.5.3 Cost savings heuristics 44 3.5.4 Improvement heuristic 46 3.6 Computational results for the uncapacitated location model 46 3.7 Lower bounds for the capacitated location model 51 3.7.1 Linear programming relaxations 51 3.7.2 Lagrangean relaxation 55 3.8 Upper bounds for the capacitated location model 57 3.8.1 Linear programming round-off heuristic 57 3.8.2 Sequential capacitated facility location heuristic 58 3.9 Computational results for the capacitated location model 59 3.9.1 Problem generation 60 3.9.2 Computational results 61 3.10 Conclusions 66 Manure utilization in farm management 69 4.1 Introduction 70 4.1.1 Problem description 70 4.1.2 Contents 71 4.2 Formulation of the extended farm management problem 71 4.3 Analysis of the extended farm management problem 74 4.3.1 Pooling property 74 4.3.2 The extended farm management problem as a bilinear problem ... 75 4.3.3 The extended farm management problem as a two step problem . 76 4.3.4 Boundary solutions 77 4.4 Classical solution approaches to the extended farm management problem . 79 4.4.1 Successive linear programming 79 4.4.2 Non-linear programming: local search 81 4.4.3 Branch-and-bound algorithms for bilinear programs 81 4.5 A new branch-and-bound algorithm 82 4.5.1 Interior check algorithm 82 4.5.2 Threshold algorithm for fractional programming
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