Assessment of the Effect of Out-of-Stock on Customers Purchasing Behavior

The objective of this exploratory study was to examine stock-outs as an event and document their effects on changes in customer attitudes. A study containing both open-ended and close-ended elements was validated through a pilot study and used to collect data from 100 randomly selected participants spending at Shewa Shopping Center in Addis Ababa. The finding indicated that repeated stock-out experiences reduced customers’ loyalty to brand and retailer and caused customers to leave both retailers and brand. Participants indicated that stock-out effects can be shielded through improved inventory management and better customer service. Explicit recommendations involved apology, price discounts and free delivery. The finding of this study will enable retailers to gain deeper considerate of how stock-out affects customers shopping experiences and loyalty, and offer alleviation measures to improve both. In addition, the finding will provide a positive change to both customers and retailers, where shoppers will enjoy pleasant shopping experiences and retailers can maintain their competitive advantage via loyalty of their customer. Keywords:  Showa Shopping Center, Stock-out, Shoppers Behavior, Buyers Loyalty DOI: 10.7176/EJBM/11-1-0

Finite production rate model with backlogging, service level constraint, rework, and random breakdown

In most real-life production systems, both random machine breakdown and the production of nonconforming items are inevitable, and adopting a backlogging policy with a predetermined minimum acceptable service level can sometimes be an effective strategy to help the management reduce operating cost or smoothen the production schedule. With the aim of addressing the aforementioned practical situations in production, this study explores the optimal production runtime for the finite production rate (FPR) model with allowable backlogging and service level constraint, rework of defective products, and random machine breakdown. Mathematical modelling is employed along with optimization techniques to derive the optimal production runtime that minimizes the long-run average system costs for the proposed FPR model. The joint effects of the allowable backlogging with a planned service level, rework, and random machine breakdown on optimal runtime decision have been carefully investigated through a numerical example and sensitivity analysis. As a result, important insights regarding various system parameters are revealed in order to enable the management to better understand, plan, and control such a practical production system

Simulación del proceso de inventarios en una poscosecha de rosas de exportación bajo un enfoque de Business Process Management

Few companies in the Colombian floriculture sector manage their inventories, causing stock breaks, causing downtime in key post-harvest operations, causing non-compliance with sales orders and damage to the flower. For this reason, the general objective is to simulate the inventory process handled in the postharvest of rose (Rosa sp.), to find opportunities for improvement. This research work was a case study carried out in an export company of rose bouquets from Cundinamarca, the province with the largest volume of export-type flower production at the national level. The rose postharvest was selected by the indicators of low production. Because this is a descriptive and exploratory investigation, a modeling of the inventory process was carried out, with the help of the managers and an analysis of times and probability of occurrence of the tasks involved. Subsequently, the simulation was done with the inventory process cycle time in Bizagi Modeler®, making a total of 36 replicas. This resulted in a total inventory process cycle time of 9,684 minutes for the Valentine's season, finding that 44 % of the activities can be optimized. Finally, it is concluded that, with the simulation of the inventory process, non-value-added activities can be found, serving as an input in the development of improvement strategies.Pocas empresas del sector floricultor colombiano hacen una gestión de sus inventarios, lo que redunda en quiebres de stock, tiempos muertos en operaciones clave de la poscosecha, incumplimientos de las órdenes de ventas y daños en la flor. Por esto, se plantea como objetivo general simular el proceso de inventarios manejado en la poscosecha de rosa (Rosa sp.), con el fin de encontrar oportunidades de mejora. Este trabajo de investigación fue un estudio de caso realizado en una empresa exportadora de ramos de rosa de Cundinamarca, ya que este departamento es el que tiene el mayor volumen de producción de flores tipo exportación a nivel nacional. Para ello, se seleccionó la poscosecha de rosa por los indicadores de producción bajos. De esta manera, se planteó una investigación descriptiva y exploratoria, y se hizo una modelación del proceso de inventarios, con ayuda de los jefes y un análisis de tiempos y de probabilidad de ocurrencia de las tareas involucradas. Posteriormente, se hizo la simulación con el tiempo de ciclo de proceso de inventario en Bizagi Modeler®, llevando a cabo un total de 36 réplicas. Esto dio como resultado un tiempo total de ciclo de proceso de inventarios de 9.684 minutos para la temporada de San Valentín, encontrando que el 44 % de las actividades pueden ser optimizadas. Finalmente, se concluye que, con la simulación del proceso de inventarios, se pueden encontrar actividades de no valor agregado, sirviendo de insumo en la elaboración de estrategias de mejora

A Spreadsheet Model that Estimates the Impact of Reduced Distribution Time on Inventory Investment Savings: What is a Day Taken out of the Pipeline Worth in Inventory?

In most of the literature dealing with inventory problems, either with a deterministic or probabilistic model, lead time is viewed as a prescribed constant or a stochastic variable that is not subject to control. But in many practical situations, lead time can be reduced by an extra crashing cost; in other words, it is controllable. This study proposes a repeatable spreadsheet optimization model that estimates the impact of reduced replenishment lead time on inventory investment savings at forward and strategic locations to motivate decision makers to support enterprise-wide distribution process improvement. The study provides users with a means of automatically calculating inventory control parameters such as safety stocks and reorder points, and automatically estimating the savings caused by lead time mean or variability reduction. A trade-off analysis can be done to determine whether reducing lead time would override the lead time crashing cost. First, the model finds the optimal safety factor of an item based on a fill rate goal using Excel Solver. Then, Excel\u27s VBA automates the process of finding safety factors for other items before and after lead time reduction. Finally, the model is applied to three different supply support activities to illustrate its superior features, which include allowing the user to change and upgrade it for future research

Production planning mechanisms in demand-driven wood remanufacturing industry

L'objectif principal de cette thèse est d'étudier le problème de planification de la production dans le contexte d'une demande incertaine, d’un niveau de service variable et d’approvisionnements incontrôlables dans une usine de seconde transformation du bois. Les activités de planification et de contrôle de production sont des tâches intrinsèquement complexes et difficiles pour les entreprises de seconde transformation du bois. La complexité vient de certaines caractéristiques intrinsèques de cette industrie, comme la co-production, les procédés alternatifs divergents, les systèmes de production sur commande (make-to-order), des temps de setup variables et une offre incontrôlable. La première partie de cette thèse propose une plate-forme d'optimisation/simulation permettant de prendre des décisions concernant le choix d'une politique de planification de la production, pour traiter rapidement les demandes incertaines, tout en tenant compte des caractéristiques complexes de l'industrie de la seconde transformation du bois. À cet effet, une stratégie de re-planification périodique basée sur un horizon roulant est utilisée et validée par un modèle de simulation utilisant des données réelles provenant d'un partenaire industriel. Dans la deuxième partie de cette thèse, une méthode de gestion des stocks de sécurité dynamique est proposée afin de mieux gérer le niveau de service, qui est contraint par une capacité de production limitée et à la complexité de la gestion des temps de mise en course. Nous avons ainsi développé une approche de re-planification périodique à deux phases, dans laquelle des capacités non-utilisées (dans la première phase) sont attribuées (dans la seconde phase) afin de produire certains produits jugés importants, augmentant ainsi la capacité du système à atteindre le niveau de stock de sécurité. Enfin, dans la troisième partie de la thèse, nous étudions l’impact d’un approvisionnement incontrôlable sur la planification de la production. Différents scénarios d'approvisionnement servent à identifier les seuils critiques dans les variations de l’offre. Le cadre proposé permet aux gestionnaires de comprendre l'impact de politiques d'approvisionnement proposées pour faire face aux incertitudes. Les résultats obtenus à travers les études de cas considérés montrent que les nouvelles approches proposées dans cette thèse constituent des outils pratiques et efficaces pour la planification de production du bois.The main objective of this thesis is to investigate the production planning problem in the context of uncertain demand, variable service level, and uncontrollable supply in a wood remanufacturing mill. Production planning and control activities are complex and represent difficult tasks for wood remanufacturers. The complexity comes from inherent characteristics of the industry such as divergent co-production, alternative processes, make-to-order, short customer lead times, variable setup time, and uncontrollable supply. The first part of this thesis proposes an optimization/simulation platform to make decisions about the selection of a production planning policy to deal swiftly with uncertain demands, under the complex characteristics of the wood remanufacturing industry. For this purpose, a periodic re-planning strategy based on a rolling horizon was used and validated through a simulation model using real data from an industrial partner. The computational results highlighted the significance of using the re-planning model as a practical tool for production planning under unstable demands. In the second part, a dynamic safety stock method was proposed to better manage service level, which was threatened by issues related to limited production capacity and the complexity of setup time. We developed a two-phase periodic re-planning approach whereby idle capacities were allocated to produce more important products thus increasing the realization of safety stock level. Numerical results indicated that the solution of the two-phase method was superior to the initial method in terms of backorder level as well as inventory level. Finally, we studied the impact of uncontrollable supply on demand-driven wood remanufacturing production planning through an optimization and simulation framework. Different supply scenarios were used to identify the safety threshold of supply changes. The proposed framework provided managers with a novel advanced planning approach that allowed understanding the impact of supply policies to deal with uncertainties. In general, the wood products industry offers a rich environment for dealing with uncertainties for which the literature fails to provide efficient solutions. Regarding the results that were obtained through the case studies, we believe that approaches proposed in this thesis can be considered as novel and practical tools for wood remanufacturing production planning