Mathematical Modeling of Harbor Scrap Metal Logistic

A new optimization model for maximizing logistic company's total operational profit on a given time frame is suggested. The company has many local providers supplying scrap metal materials of different categories. The materials are reprocessed into one particular category of scrap and exported abroad via heterogeneous fleet of ships. The total demand for the product is known in advance according to a contract. The purchase price of scrap metal is described as a piecewise linear function. The company also has many other expenses. The goal is to find the best strategy for the company to maximize total profit of performing contracts. The company should solve such a problem after getting every new contract for scrap metal exporting. None of the existing decision support systems is able to cope with this problem. We offer a mathematical model and a software implementation of the problem solving mechanism. The computational experiments have been performed on real test instances.