A multi-echelon multi-commodity, logistic system design at the Dead Sea Works Ltd

The Dead Sea Works Ltd extracts more than 2 million ton of potassium a year from the Dead Sea and ships it by surface and marine transportation to markets around the world. Product mix and market distribution changes have made it necessary to redesign the surface logistics system. This system consists of four sites with a total of more than 300,000 ton of roofed storage capacity. The purpose of the study was to suggest changes in the storage capacity of each product at each of the sites. We have designed a model that expresses the expected annual loss for the firm and have solved it under potential market scenarios and management and technological constraints. Sensitivity analyses were then carried out for several uncertain cost and reliability parameters. Based on the best system configuration for each scenario, alternative configurations were designed in detail and compared under potential market scenarios. With a clear understanding of the risks and expected benefits involved, the decision makers then selected the best configuration. The annual net benefit from implementing the proposed solution is expected to be 1.7 million dollars.