A Facility Location-Allocation Model for Determining Number of Depot to Distribute Material in the Rattan Furniture Industry by Considering Dynamic Demand

This paper is a study of a facility location-allocation problem in the rattan furniture industry. There are six production centers (PCs) of rattan furniture in Surakarta and its surroundings. However, their export sales are decline due to some possible problems in raw rattan distribution network from the sources centers (SCs), e.g. Borneo and Celebes Island to production centers. In the previous research, the model was expanded to support local government decide to determine optimal number of depot by consider static demand. This policy is aimed to cut the distribution channel and reduce total supply chain costs. Due to changing of global market, the demand is fluctuate. The previous model cannot anticipate this situation; consequently the local government needs a facility location-allocation model by considering dynamic demand. The objective of this research is to develop a model for supporting the local government to decide optimal number of depot by considers dynamic demand. A mixed integer non-linear programming (MINLP) was proposed to minimize total supply chain costs. The proposed model assumed that the demand for multiple products is known in advance. The potential raw rattan depot and source locations as well as their maximum capacities are also known. Finally, the proposed model can be used as instrument decision making to determine facility location-allocation. Keywords: dynamic demand, a facility location-allocation model, rattan industry competitiveness, total supply chain costs

The Incremental Cooperative Design of Preventive Healthcare Networks

This document is the Accepted Manuscript version of the following article: Soheil Davari, 'The incremental cooperative design of preventive healthcare networks', Annals of Operations Research, first published online 27 June 2017. Under embargo. Embargo end date: 27 June 2018. The final publication is available at Springer via http://dx.doi.org/10.1007/s10479-017-2569-1.In the Preventive Healthcare Network Design Problem (PHNDP), one seeks to locate facilities in a way that the uptake of services is maximised given certain constraints such as congestion considerations. We introduce the incremental and cooperative version of the problem, IC-PHNDP for short, in which facilities are added incrementally to the network (one at a time), contributing to the service levels. We first develop a general non-linear model of this problem and then present a method to make it linear. As the problem is of a combinatorial nature, an efficient Variable Neighbourhood Search (VNS) algorithm is proposed to solve it. In order to gain insight into the problem, the computational studies were performed with randomly generated instances of different settings. Results clearly show that VNS performs well in solving IC-PHNDP with errors not more than 1.54%.Peer reviewe

The Elderly Centre Location Problem

© The Operational Research Society 2020. This is an Accepted Manuscript of an article published by Taylor & Francis in Journal of the Operational Research Society on 12 Feb 2020, available online: https://doi.org/10.1080/01605682.2020.1718020.Increased human life expectancy combined with declining birth rates around the globe has led to ageing populations, particularly in the developed world. This phenomenon brings about increased dependency ratios and calls for setting new policies for the elderly citizens. This comprises the provision of a set of life-enhancing services in an accessible and equitable way. In this paper, we consider a multi-period problem of locating senior centres offering these services to the elderly population against budget constraints and capacity limitations. We assume that the attractiveness of facilities to elderlies is inversely proportional with the travel time to access these facilities. Both consistent and inconsistent versions of the problem are considered, aiming at identifying the set of facilities to operate in each region at each period, the service type(s) to be offered and the allocation of budget in each period to location and operation of facilities. A mixed integer mathematical programming model is presented, an efficient iterated local search procedure is proposed and managerial insights are provided.Peer reviewedFinal Accepted Versio

Analysis of an international distribution hub for fast moving consumer goods

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2009.Includes bibliographical references (leaf 52).The focus of this research is creating a framework to accurately assess the benefits of hub capability in an international distribution network for fast moving consumer packaged goods. The traditional inventory centralization dilemma requires an evaluation of whether the reduction in holding costs outweighs the increases in transportation and handling costs. We developed a mixed integer programming model to determine the benefits of adding hub capability to Consumer Co.'s Northwest Latin American import supply chain. Consumer Co.'s NWLA division imports products from Argentina, Brazil and Mexico to eleven countries within Central and South America, each operating a distribution center. By adding hub capability in the Colon Free Trade Zone, our model determined that the lowest cost could be achieved using a "Hybrid" solution, where some channels flowed through the hub and others were shipped direct. This network design would result in a 4.4% reduction in annual relevant costs. A counter-intuitive revelation was the fact that transportation costs could actually decrease. Similar to airlines, carriers can sometimes offer lower rates for indirect shipments passing through a high volume transit point instead of shipping the product directly through a less traveled route. Hub capability in the Colon Free Trade Zone also provides Consumer Co. with the flexibility to tailor their supply chain to potential changes in the fluctuating Latin American environment. Increasing customer expectations can lead to scenarios with higher safety stocks, for which centralization can provide the highest benefits.by Sebastian Ortiz Duran and Richard Hawks.M.Eng.in Logistic

Design, Management and Control of Logistic Distribution Systems

Nowadays global and extended markets have to process and manage increasingly differentiated products, with shorter life cycles, low volumes and reducing customer delivery times. Moreover several managers frequently have to find effective answers to one of the following very critical questions: in which kind of facility plant and in which country is it most profitable to manufacture and/or to store a specific mix of products? What transportation modes best serve customer points of demand, which can be located worldwide? Which is the best storage capacity of a warehousing system or a distribution center (DC)? Which is the most suitable safety stock level for each item of a company's product mix? Consequently logistics is assuming more and more importance and influence in strategic and operational decisions of managers of modern companies operating worldwide. The Council of Logistics Management defines logistics as "the part of supply chain process that plans, implements and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers' requirements". Supply Chain Management (SCM) can be defined as "the integration of key business processes from end-user through original suppliers, that provides product, service, and information that add value for customers and other stakeholders" (Lambert et al., 1998). In accordance with these definitions and with the previously introduced variable and critical operating context, Figure 1 illustrates a significant conceptual framework of SCM proposed by Cooper et al. (1997) and discussed by Lambert et al. (1998). Supply chain business processes are integrated with functional entities and management components that are common elements across all supply chains (SCs) and determine how they are managed and structured. Not only back-end and its traditional stand-alone modelling is addressed, but the front-end beyond the factory door is also addressed through information sharing among suppliers, supplier's suppliers, customers, and customers' customers. In the modern competitive business environment the effective integration and optimization of the planning, design, management and control activities in SCs are one of the most critical issues facing managers of industrial and service companies, which have to operate in strongly changing operating conditions, where flexibility, i.e. the ability to rapidly adapt to changes occurring in the system environment, is the most important strategic issue affecting the company success. As a consequence the focus of SCM is on improving external integration known as "channel integration" (Vokurka & Lummus, 2000), and the main goal is the optimization of the whole chain, not via the sum of individual efficiency maximums, but maximising the entire system thanks to a balanced distribution of the risks between all the actors. The modelling activity of production and logistic systems is a very important research area and material flows are the main critical bottleneck of the whole chain performance. For this reason in the last decade the great development of research studies on SCM has found that new, effective supporting decisions models and techniques are required. In particular a large amount of literature studies (Sule 2001, Manzini et al. 2006, Manzini et al. 2007a, b, Gebennini et al. 2007) deal with facility management and facility location (FL) decisions, e.g. the identification of the best locations for a pool of different logistic facilities (suppliers, production plants and distribution centers) with consequent minimization of global investment, production and distribution costs. FL and demand allocation models and methods object of this chapter are strongly associated with the effective management and control of global multi-echelon production and distribution networks.A few studies propose operatio..

SUPPLY CHAIN NETWORK DESIGN: RISK-AVERSE VS. RISK-NEUTRAL DECISION MAKING

Recent events, such as the Heparin tragedy, highlight the necessity for designers and planners of supply chain networks to consider the risk of disruptions in spite of their low probability of occurrence. One effective way to hedge against supply chain network disruptions is to have a robustly designed supply chain network. This involves strategic decisions, such as choosing which markets to serve, which suppliers to source from, the location of plants, the types of facilities to use, and tactical decisions, such as production and capacity allocation. In this dissertation, we focus on models for designing supply chain networks that are resilient to disruptions. We consider two types of decision making policies. A risk-neutral decision making policy is based on the cost minimization approach, and the decision-maker defines the set of decisions that minimize expected cost. We also consider a risk-averse policy wherein rather than selecting facilities that minimize expected cost, the decision-maker uses a Conditional Value-at-Risk approach to measure and quantify risk. However, such network design problems belong to class of NP hard problems. Accordingly, we develop efficient heuristic algorithms and metaheuristic approaches to obtain acceptable solutions to these types of problems in reasonable runtimes so that the decision making process is facilitated with at most a moderate reduction in solution quality. Finally, we perform statistical analyses (e.g., logistic regression) to assess the likelihood of selection for each facility. These models allow us to identify the factors that impact facility selection in both the risk-neutral and risk-averse policies

Network design and safety stock placement for a multi-echelon supply chain

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2008.Includes bibliographical references (leaf 80).With the increasing complexities in supply chains and increasing global trade, integrated supply chain network design is utilized by the firms in order to reduce the overall cost while meeting the customer demand with requisite levels of service. This view of collaborative approach towards supply chain design has the potential of providing competitive edge for the firms in a highly competitive environment with high variability of end customer demand. In this study we present a framework for the design of a multi echelon supply chain network facing uncertain demand. We develop a comprehensive procedure for the optimization of a multi echelon supply chain. We provide the details of each step to describe the methodology and develop mathematical models for the design of a multi echelon distribution network. The procedure has been developed for the design of network flow and the placement of safety stock for a multi echelon distribution network.by Hitesh Gupta.M.Eng.in Logistic

A collaborative framework in outbound logistics for the us automakers

The competitive landscape of the U.S. automotive market has transformed from the traditional Big Three players to too many viable players. In 2008-2009, the harsh market conditions, excess production capacity, capital asset redundancies, and many inefficient strategies submerged as the roadblocks for the US automakers to stay competitive and profitable in the North American market. In this new competitive era, cross-company collaboration in product development, standardizing and communizing supply base, sharing flexible manufacturing platforms, using common inbound and out bound logistics service providers and warehousing etc. can play vital roles for the US automakers to reduce overall cost and return to profitability. Through the horizontal collaboration in the outbound logistics operations, these companies can create close-knit business partnership and act faster than the foreign rivals in delivering finished vehicles at the optimum cost. The optimization of outbound logistics operations through consolidation and collaboration among OEMs has tremendous potential to contribute to the profitability by lowering the cost of transportation, in-house inventory, transportation time, and facility costs. The collaboration in the intra- and inter-OEM outbound logistics operations is a critical area that the US automakers need to pay attention and prioritize in their cost reduction initiatives. This research presents an integrated collaboration framework for the outbound logistics operations of the US automakers. In our framework, we propose three potential levels for the US automakers to form outbound logistics collaboration: operational, tactical, and strategic. Our research proposition is to improve the performance of outbound logistics systems of automotive OEMs by means of horizontal collaboration between plants and competing OEMs. The proposed research thus relates to the literature on logistics system design and management and horizontal collaboration in supply chain management. The collaboration framework is demonstrated through a real world case study in US automotive industry. The contribution of this research is the introduction of a framework for intra- and inter-OEM collaboration and the development of novel logistics network design and flow models integrated with inventory models, lost sales, and expedited shipment. Besides the contribution to the academic literature, the proposed collaborative distribution system is a new concept in the automotive industry. Hence, this novel research work will also benefit to the practitioners. Keywords: Operational Collaboration, Tactical Collaboration, Strategic Collaboration, Frequency based Inventory, Customer Patience and Lost Sales, Expedited Shipments