An optimization model for the operations of a pallet pool with both radio-frequency identification–tagged pallets and non-tagged pallets

Abstract

In a pallet pool, pallets would be delivered through a supply chain. The operation procedure that consists of at least five operation processes as distribution, reposition, recycling, purchase (or rent), and maintenance is quite complex. These pallets are likely to be damaged, lost, destroyed, and so on. So, it is necessary to monitor the pallets using radio-frequency identification technology. However, there is no literature on the management of a pallet pool with both radio-frequency identification–tagged pallets and non-tagged pallets being put into consideration. In our research, an optimization model is presented to manage such a pallet pool. The objective of the optimization model is to minimize the total operation cost of a pallet pool including distribution cost, reposition cost, recycling cost, purchase or rent cost, loss cost, maintenance cost, loading and unloading cost, storage cost, and punishment cost. A particle swarm optimization algorithm is developed in Microsoft Visual Basic. Our numerical example shows that the optimization model and particle swarm optimization algorithm are effective. It is proved that the model and algorithm also can be used to measure whether the investment of a radio-frequency identification system is valuable or not. We proposed some suggestions for the pallet pools management.