Integrated Optimization And Simulation Model For Resource Acquisition And Utilization - An Application To Ocean/River Articulated Tug/Barge System by Ming Qi M.A. in Marine Affairs, University of Rhode Island (1991) M.S. in Ocean Engineering, University of Rhode Island (1990) B.S. in Physical Oceanography, Shandong College of Oceanography (1982) Submitted to the Department of Ocean Engineering in partial fulfillment of the requirements for the degree of Doctor of Science in Ocean Systems Management at the MASSACHUSETTS INSTITUTE OF TECHNOLOGY February 1997 © Massachusetts Institute of Technology 1997. All rights reserved. A UTH O R ................................................... ........ .......... DEPARTMENT EAN ENGINEERING DECEMBER 11, 1996 CERTIFIED BY .......................... .. .......... ...... .. - .... DR. ERNST G. FRANKEL PROFESSOR OF MARINE SYSTEMS & MANAGEMENT THESIS SUPERVISOR A CCEPTED BY ........................ ................................ / ~DR. J. KIM VANDIVER CHAIRMAN, DEPARTMENTAL COMMITTEE ON GRADUATE STUDIES . i......... (rDF ' - APR 2 9 1997 Integrated Optimization And Simulation Model For Resource Acquisition And Utilization -An Application To Ocean/River Articulated Tug/Barge System by Ming Qi Submitted to the Department of Ocean Engineering on December 11, 1996, in partial fulfillment of the requirements for the degree of Doctor of Science in Ocean Systems Management Abstract simulation (IAIOS) approach for modeling complex systems subject to resource constraints as well as alternative acquisition and utilization. This proposed modeling approach is tested by an application to a real world ocean/river articulated tug/barge (ORATB) transport system. The integrated modeling approach is adaptive and iterative in the sense that the optimization model first suggests the acquisition strategy, which is then tested and evaluated in the simulation model. If the performance of the acquisition strategy is inferior, constraints and cost parameters are added and/or modified in the optimization model and the procedure is iterated until no significant improvement in performance can be achieved. The distinction of this proposed IAIOS approach is that it solves resource acquisition and resource utilization simultaneously. In addition, this modeling approach provides the mechanism for decision makers to interact with the model at different levels during the whole decision making process. The proposed IAIOS modeling approach is applied to solve the acquisition and utilization problems in designing the ORATB system for transporting iron ore and containers between a coastal port and the Yangtze River ports in China. Through this application, the IAIOS modeling approach is proved to be an effective tool for decision makers to test the performance of the ORATB operations under a wide range of anticipated conditions, and thus ensures a satisfactory deployment of the transport system. Thesis Committee members: Prof. Ernst G. Frankel, thesis supervisor Department of Ocean Engineering, MIT Prof. Jeremy F. Shapiro Sloan School of Management, MIT Prof. Gordon M. Kaufman Sloan School of Management, MIT Acknowledgments irst and foremost I thank my thesis advisor, Dr. Ernst G. Frankel, for his invaluable advice and guidance throughout the entire process of this study. This dissertation could not have been completed without Prof. Frankel's generous support. My sincere thanks also go to my thesis committee members, Prof. Jeremy F. Shapiro and Prof. Gordon M. Kaufman of the Sloan School of Management, for their inspiration and advice on this research. Their understanding and willingness to spend so much of their precious time on me to improve this study is highly appreciated. My deep appreciation is also extended to other faculty and stuff members in the Department of Ocean Engineering for their special concerns and encouragement during my whole study in Course 13. I thank our administrative secretary, Ms. Sheila McNary, for her moral support and assistance at all appropriate moments. I learned many things from our daily conversation. In addition, I thank Sheila indeed for her industrious effort to proof read this manuscript. To all my friends at MIT, especially to Mr. Richard Preston, Dr. Xiaoming Wang, Mr. Lian Shen, Mr. Yu Jin, Dr. Di Jin, Mr. Chris Hayes, Dr. Qing Zhou, Dr. Qin Chu, Mr. Matt Tedesco, Dr. Hua He, Dr. Xiaohong Yu, Dr. Ronald Chu, and Mr. Qiang Gao, thank you all for the greatly needed friendly support in many ways. You made my study at MIT a most pleasant experience in my life. On a more personal note, I thank my wife, Yudong, from the bottom of my heart for her irreplaceable support and encouragement all my life. I dedicate this dissertation to her and our two lovely children, Bryan and Taryn. Contents Abstract Acknowledgments 1. INTRODUCTION ................................. ................................................................... 1.1. B ACKGROUN D ..................................... ................................................................. 9 1.2. PROBLEM STATEM ENT .............................................................................................. 11 1.3. RESEARCH OBJECTIVES AND SCOPES ............... ...................................... 12 1.4. THESIS STRUCTURE ................................. .................................................... 15 2. THE ORATB TRANSPORT SYSTEM ........................................ ....... 17 2.1. INTRODUCTION To TUG/BARGE SYSTEM ................................................... 17 2.2. THE ORATB TRANSPORT SYSTEM.................................................................... 23 2.3. PROBLEM D EFINITION................................... ................................................... 29 2.4. LITERATURE REVIEW ON RESOURCE ACQUISITION AND UTILIZATION .................... 30 2.5. C HAPTER SUM M ARY ................................................................................................. 40 3. MODEL DEVELOPMENT ..................................................................................... 44 3.1. INTRODUCTION ........................................................ ........................................... 44 3.2. STRUCTURE OF THE IAIOS MODEL ............................................ ........... 46 3.3. THE OPTIMIZATION M ODEL .......................................................................... 46 3.3.1. Optim ization Procedures.................... ................................. .................... 50 3.3.2. Formulation Of The OptimizationModel ................................................... 54 3.3.3. General Algebraic Modeling System............................................... 58 3.3.4. The ORA TB GAMS Model Construction........................................................62 3.3.5. GAMS Model Execution............. ................................ .................. 64 3.4. SIM ULATION M ODEL ................................ .................................................... 88 3.4.1. S im ulatio n Process ............................................................................................ 9 1 3.4.2. Simulation Modeling Perspectives................................................ .........93 3.4.3. Simulation Language On Alternative Modeling..............................................99 3.4. 4. The ORA TB SLAM Model Construction.......................................... 102 3.4.5. SLAM Model Execution................................................... 103 3.5. ADAPTIVE ITERATION MECHANISM OF THE IAIOS MODEL ................................... 112 3.6. CHAPTER SUMMARY ...................................................................................... 118 4. CASE DESIGN AND NUMERICAL RESULTS ................................................ 120 4.1. THE CASE: THE YANGTZE VALLEY ORATB TRANSPORT SYSTEM ....................... 120 4.1.1. Shipping Demand In The Yangtze Valley.................................................. 125 4.1.2. Shipping Management In The Yangtze Valley.................... ......................... 155 4.1.3. Barriers For Future Shipping Development In The Yangtze Valley............ 157 4.2. APPLICATION OF THE PROPOSED IAIOS MODEL ..................................... .... 161 4.2.1. Optimization Model Application: Results And Evaluation.......................... 162 4.2.2. Simulation Model Application: Results And Evaluation.............................. 178 4.2.3. IntegratedModel Application: Results And Evaluation ............................. 188 4.3. PARAMETRIC COST ANALYSIS BETWEEN THE CURRENT IRON ORE TRANSPORT AND THE ORATB SYSTEM ....................................................................................................... 190 4.4. CHAPTER SUMMARY ........................................................................................ 193 5. SUMMARY AND CONCLUSION ...................................................................... 195 5.1. SUMMARY OF M AJOR FINDINGS ............................................................................ 195 5.2. CONCLUSIONS AND FUTURE RESEARCH .............................................................. 197 References List of Tables TABLE 1 MEASURES OF FREIGHT TRANSPORTATION ENERGY EFFICIENCY ..................... 18 TABLE 2 TYPICAL CHARACTERISTICS OF AN ORATB SYSTEM ..................................... 27 TABLE 3 CAPITAL AND OPERATING COSTS OF ORATB SYSTEMS..................................28 TABLE 4 THE ORATB OPTIMIZATION MODEL INPUT STATEMENTS ................................ 65 TABLE