Application of Optimization in Production, Logistics, Inventory, Supply Chain Management and Block Chain

The evolution of industrial development since the 18th century is now experiencing the fourth industrial revolution. The effect of the development has propagated into almost every sector of the industry. From inventory to the circular economy, the effectiveness of technology has been fruitful for industry. The recent trends in research, with new ideas and methodologies, are included in this book. Several new ideas and business strategies are developed in the area of the supply chain management, logistics, optimization, and forecasting for the improvement of the economy of the society and the environment. The proposed technologies and ideas are either novel or help modify several other new ideas. Different real life problems with different dimensions are discussed in the book so that readers may connect with the recent issues in society and industry. The collection of the articles provides a glimpse into the new research trends in technology, business, and the environment

An enhanced approximation mathematical model inventorying items in a multi-echelon system under a continuous review policy with probabilistic demand and lead-time

An inventory system attempts to balance between overstock and understock to reduce the total cost and achieve customer demand in a timely manner. The inventory system is like a hidden entity in a supply chain, where a large complete network synchronizes a series of interrelated processes for a manufacturer, in order to transform raw materials into final products and distribute them to customers. The optimality of inventory and allocation policies in a supply chain for a cement industry is still unknown for many types of multi-echelon inventory systems. In multi-echelon networks, complexity exists when the inventory issues appear in multiple tiers and whose performances are significantly affected by the demand and lead-time. Hence, the objective of this research is to develop an enhanced approximation mathematical model in a multi-echelon inventory system under a continuous review policy subject to probabilistic demand and lead-time. The probability distribution function of demand during lead-time is established by developing a new Simulation Model of Demand During Lead-Time (SMDDL) using simulation procedures. The model is able to forecast future demand and demand during lead-time. The obtained demand during lead-time is used to develop a Serial Multi-echelon Inventory (SMEI) model by deriving the inventory cost function to compute performance measures of the cement inventory system. Based on the performance measures, a modified distribution multi-echelon inventory (DMEI) model with the First Come First Serve (FCFS) rule (DMEI-FCFS) is derived to determine the best expected waiting time and expected number of retailers in the system based on a mean arrival rate and a mean service rate. This research established five new distribution functions for the demand during lead-time. The distribution functions improve the performance measures, which contribute in reducing the expected waiting time in the system. Overall, the approximation model provides accurate time span to overcome shortage of cement inventory, which in turn fulfil customer satisfaction

Modelos de Inventarios con Productos Perecederos: Revisión de la Literatura

This paper presents a review of the main characteristics of the mathematical modelsdeveloped by the scientific community in order to determine an optimal inventory policyfor deteriorating items. Thus, a classified bibliography of 390 articles published from2001 to 2014 in high-impact journals is submitted while considering the type of demandand deterioration, the integration of inventory and pricing decisions, the inclusionof shortage and/or the time value of money, the consideration of multiple items and/ormulti-echelon systems, and the incorporation of uncertain parameters other than demand.Finally, research questions not yet addressed by the research community in the field ofinventory control for deteriorating items are pointed out.En el presente artículo se lleva a cabo una revisión de las principales características estudiadas por la comunidad científica en el desarrollo de modelos matemáticos que buscan definir una política de inventario óptima para productos que se deterioran. De este modo, se referencian 390 artículos publicados a partir del año 2001 en revistas de gran impacto, teniendo en cuenta: el tipo de demanda y deterioro representado en los modelos matemáticos, el estudio de una política de precio óptima, la inclusión de faltantes y/o valor del dinero en el tiempo, el estudio de múltiples productos y/o dos o más eslabones de la cadena de suministro, y la utilización de parámetros o variables difusas. Finalmente, se identifican oportunidades de investigación que a la fecha no han sido abordadas por la comunidad científica en este campo del conocimiento

Supply chain coordination and integration under yield loss

The primary objective of this dissertation is to develop analytical models for typical supply chain situations to help supply chain decision-makers under supply yield loss. We derive solution procedures for each model and present several managerial insights obtained from our models through numerical examples. Additionally, this research provides decision-makers insights on how to incorporate uncertainty in demand and supply and shortage information into a mathematical model. This study deals with three forms of integrated cost-profit models under different scenarios including coordination policy and supply yield loss in a two-stage supply chain involving a retailer and a supplier, dealing with a single product under deterministic condition. We compare the profits of the whole supply chain system under the coordinated policy with those of individual decision making approaches and demonstrate the efficiency of coordination. These models attempts to find the optimal solutions for the retailer’s order quantity, quality level, amount of emergency procurement, and the production and shipment decisions of the supplier, so that the resulting joint total profit for the entire supply chain is maximized. We illustrate our model and the potential benefits of outsourcing in a supply chain system through a numerical example. Extending the analyses obtained above, we then develop models for an integrated supplier–retailer supply chain under imperfect production and shortages, with the additional decision variable of market pricing on the part of the retailer. We assume that market demand is sensitive to the retailer’s selling price and study the combined operation and pricing decisions in the supply chain. We develop profit maximization models for the cases of independent and joint optimization. The results of obtained from our analyses demonstrate that the individual profit, as well as joint profit can be increased by our suggested model, under a non-linear price dependent demand function. In addition, the results with retailer-supplier coordination tend to be superior, which leads to illustrate that setting appropriately retailer’s selling price can increase market demand and the profits of both parties, as well as that of the supply chain. Finally, numerical examples are presented to illustrate these models, and the sensitivity analyses of a selected set of model parameters on the total profit is conducted. A major finding of this study is that coordination between the retailer and the supplier improves channel profit significantly. Furthermore, the possibility of external procurement tends to improve total system profitability as the price sensitivity of demand increases.Ph.D., Business Administration -- Drexel University, 201

Responsible Inventory Models for Operation and Logistics Management

The industrialization and the subsequent economic development occurred in the last century have led industrialized societies to pursue increasingly higher economic and financial goals, laying temporarily aside the safeguard of the environment and the defense of human health. However, over the last decade, modern societies have begun to reconsider the importance of social and environmental issues nearby the economic and financial goals. In the real industrial environment as well as in today research activities, new concepts have been introduced, such as sustainable development (SD), green supply chain and ergonomics of the workplace. The notion of “triple bottom line” (3BL) accounting has become increasingly important in industrial management over the last few years (Norman and MacDonald, 2004). The main idea behind the 3BL paradigm is that companies’ ultimate success should not be measured only by the traditional financial results, but also by their ethical and environmental performances. Social and environmental responsibility is essential because a healthy society cannot be achieved and maintained if the population is in poor health. The increasing interest in sustainable development spurs companies and researchers to treat operations management and logistics decisions as a whole by integrating economic, environmental, and social goals (Bouchery et al., 2012). Because of the wideness of the field under consideration, this Ph.D. thesis focuses on a restricted selection of topics, that is Inventory Management and in particular the Lot Sizing problem. The lot sizing problem is undoubtedly one of the most traditional operations management interests, so much so that the first research about lot sizing has been faced more than one century ago (Harris, 1913). The main objectives of this thesis are listed below: 1) The study and the detailed analysis of the existing literature concerning Inventory Management and Lot Sizing, supporting the management of production and logistics activities. In particular, this thesis aims to highlight the different factors and decision-making approaches behind the existing models in the literature. Moreover, it develops a conceptual framework identifying the associated sub-problems, the decision variables and the sources of sustainable achievement in the logistics decisions. The last part of the literature analysis outlines the requirements for future researches. 2) The development of new computational models supporting the Inventory Management and Sustainable Lot Sizing. As a result, an integrated methodological procedure has been developed by making a complete mathematical modeling of the Sustainable Lot Sizing problem. Such a method has been properly validated with data derived from real cases. 3) Understanding and applying the multi-objective optimization techniques, in order to analyze the economic, environmental and social impacts derived from choices concerning the supply, transport and management of incoming materials to a production system. 4) The analysis of the feasibility and convenience of governmental systems of incentives to promote the reduction of emissions owing to the procurement and storage of purchasing materials. A new method based on the multi-objective theory is presented by applying the models developed and by conducting a sensitivity analysis. This method is able to quantify the effectiveness of carbon reduction incentives on varying the input parameters of the problem. 5) Extending the method developed in the first part of the research for the “Single-buyer” case in a "multi-buyer" optics, by introducing the possibility of Horizontal Cooperation. A kind of cooperation among companies in different stages of the purchasing and transportation of raw materials and components on a global scale is the Haulage Sharing approach which is here taken into consideration in depth. This research was supported by a fruitful collaboration with Prof. Robert W. Grubbström (University of Linkoping, Sweden) and its aim has been from the beginning to make a breakthrough both in the theoretical basis concerning sustainable Lot Sizing, and in the subsequent practical application in today industrial contexts

Presenting an economic lot-sizing scheduling problem considering maximum permissible carbon emissions

Carbon emissions related to energy consumptions from the manufacturing industry have become a substantial part of environmental burdens. Carbon emissions related to energy consumptions from the manufacturing industry have become a substantial part of environmental burdens. This study presents carbon emission constraint into the economic lot scheduling problem to reduce carbon emissions. The aim of this research to satisfy customer demand for various items over the planning horizon, with an objective to minimize total costs, includes setup, production, rework and holding costs. In this problem, it is assumed that the production process is defective, and during the process some of the goods are produced with undesirable quality. Defective products can be sold using a rework process. This proposed model has been proven to be a nonlinear convex programming problem. Hence, the optimal solution of this proposed model can be obtained using the derivative method. Finally, a hypothetical example is solved to demonstrate the performance of the proposed exact solution algorithm

Stok kontrolü ve ekonomik sipariş miktarı modellerinde yeni açılımlar: ödemelerde gecikmeye izin verilmesi durumu ve bir model önerisi

Stok kontrol modelleri, talebin kesin olarak bilinip bilinememesine göre deterministik ve olasılıklı modeller olarak ikiye ayrılmaktadır. Deterministik stok kontrol modelleri arasında en yaygın kullanılan modeller Klasik Ekonomik Sipariş ve Üretim Miktarı Modelleridir. Bu modellerde ele alınan varsayımların çoğu, gerçek hayatta geçerli olabilen değişik durumları veya içinde bulunulan ekonomik koşulları dikkate almamaktadır. Dolayısıyla, sözü edilen varsayımların gevşetilmesi veya ek yeni varsayımlar yardımıyla, gerçek yaşamla daha tutarlı ve geçerli ekonomik koşulları dikkate alan yeni modeller üretilmiştir. Örneğin, stoksuzluk, öğrenme, enflasyon ve paranın zaman değeri etkileri, stoktaki ürünlerin zamanla bozulması, kusurlu ürün, ödemelerde gecikmeye izin verilmesi gibi yeni açılımlar, bu alanda geniş bir çalışma yelpazesi oluşmasını sağlamıştır. Bu çalışmada, klasik ekonomik sipariş miktarı modellerinde geçerli olan varsayımlardan bazıları gevşetilerek gelen siparişlerin belli bir oranda kusurlu ürün içerdiği, stoksuzluğa ve ödemelerde belli bir süre gecikmeye izin verildiği durum için yeni bir ekonomik sipariş miktarı modeli elde edilmektedir. Modelde, ödemelerde izin verilen gecikme süresinin iki farklı durumu için optimal değerler ile izin verilen gecikme süresi ve kusurlu ürün oranı arasındaki ilişkiler belirlenmektedir. Ayrıca, geliştirilen model için sayısal örnekler verilmekte ve izin verilen gecikme süresi ve kusurlu ürün oranındaki değişimlerin etkileri duyarlılık analizi ile incelenmektedir. Yapılan analizler sonucu ödemelerde izin verilen gecikme süresi arttıkça sipariş miktarının azaldığı toplam karın ise azaldığı görülmektedir. Anahtar Kelimeler: Ekonomik Sipariş Miktarı, Kusurlu Ürün, Ödemelerde Gecikmeye İzin Verilmesi, Stoksuzluk.\ud Inventory control models are classified as deterministic and stochastic models upon the condition that the demand is definitely known, or not. Economic Order and Production Quantity models are among the most widely used techniques in deterministic inventory control models. As a result of many unrealistic assumptions embedded in these models, some real life situations and current economic circumstances are not considered. Therefore, by loosening these assumptions and introducing some extra hypotheses, many new models consistent with real life and consider current economic conditions were developed. A vast literature has occurred under these conditions which are known as new approaches such as shortage, effect of learning, inflation and time value of money, deterioration, defective items and permissible delay in payment. In this study, a new model is proposed in the case of defective items, permissible delay in payments and shortage by loosening some of the assumptions of classical Economic Order Quantity models. For two case of permissible delay in payments, the relationships between permissible delay time, rate of defective item and optimal values are determined. Furthermore, numerical examples are given and analyzed for the developed model. Changes in the optimal values with respect to the rate of defective item and permissible delay in payments are analyzed with sensitivity analysis. Result of the analysis show that while permissible delay of payment increases order quantity decreases and total profit increases. However when rate of defective items increases order quantity increases and total profit decreases. Keywords: Economic Order Quantity, Defective Items, Permissible Delay in Payments, Shortag