Assessment of joint inventory replenishment: a cooperative games approach

This research deals with the design of a logistics strategy with a collaborative approach between non-competing companies, who through joint coordination of the replenishment of their inventories reduce their costs thanks to the exploitation of economies of scale. The collaboration scope includes sharing logistic resources with limited capacities; transport units, warehouses, and management processes. These elements conform a novel extension of the Joint Replenishment Problem (JRP) named the Schochastic Collaborative Joint replenishment Problem (S-CJRP). The introduction of this model helps to increase practical elements into the inventory replenishment problem and to assess to what extent collaboration in inventory replenishment and logistics resources sharing might reduce the inventory costs. Overall, results showed that the proposed model could be a viable alternative to reduce logistics costs and demonstrated how the model can be a financially preferred alternative than individual investments to leverage resources capacity expansions. Furthermore, for a practical instance, the work shows the potential of JRP models to help decision-makers to better understand the impacts of fleet renewal and inventory replenishment decisions over the cost and CO2 emissions.DoctoradoDoctor en Ingeniería Industria

Improving supply chain profit through reverse factoring: A new multi-suppliers single-vendor joint economic lot size model

3siSupply chain finance has been gaining attention in theory and practice. A company’s financial position affects its performance and survivability in dynamic and volatile markets. Those that have weak financial performance are vulnerable when operating in environments that are uncertain and financially unstable. Companies adopt various solutions and techniques to manage, effectively and efficiently, the flow of money to and from its suppliers and buyers. Reverse factoring is an innovative technique in supply chain financing. This paper develops a joint economic lot size model where a vendor coordinates operational and financial decisions with its multiple suppliers through the establishment of a reverse factoring arrangement. The creditworthy vendor systematically informs a financial institution (e.g., bank) of payment obligations to selected suppliers, enabling the latter to borrow against the value of the relevant accounts receivable at low interest (borrowing) rates. The paper also presents a numerical example and a sensitivity analysis to illustrate the behavior of the model and to compare the economic and operational performance of a supply chain with and without a reverse factoring agreement. The results show that the establishment of a reverse factoring agreement within the supply chain improves the economic performance and impacts on the operational decisions.openopenMarchi B.; Zanoni S.; Jaber M.Y.Marchi, B.; Zanoni, S.; Jaber, M. Y

EOQ in a Just in Time (JIT) World: An Empirical Analysis of the Impact of EOQ Variables on Operating Profit: The Case of Nigerian Bottling Company Plc

With today’s uncertain economy, companies are searching for alternative methods to keep ahead of their competitors by effectively driving sales and by cost reduction. Big manufacturing companies – as well as other companies, do not stand a chance in today’s environment if they do not have an appropriate inventory control model intact. The Economic Order Quantity (EOQ) and Just in Time (JIT) have been used for many years, but yet some companies have not taken advantage of it. An Economic order quantity could assist in deciding what would be the best optimal order quantity at the company’s lowest price. Similarly JIT focuses on providing customers with stocks at the right time and with the right quantity thereby reducing in process inventory and carrying costs and maximizing profits at the same time (Gonzalez and Gonzalez, 2010). All these in place in any organization are known as its inventory management system which invariable needs to be as efficient as possible in other to reduce costs and translate in profit maximization. In recent times there has been a clarion call to abandon EOQ model in place of JIT.  Perhaps this is because of the perceived benefits of JIT which includes:  time reduction as well as improved flow of goods from warehouse to shelves which in turn leads to regular replenishment of stock amongst others.  However, one might be tempted to ask: is this call for abandonment justifiable? Using JIT does it actually reduce costs as well as lead to profit maximization in the organization?. This study looks at the relevance of EOQ Variables – Cost of goods purchased and overheads in impacting on the profitability of the firm. In doing this,  the relationship of increase in cost of goods purchased against Operating profit  as well as increase in Overhead against Operating profit  of  manufacturing  companies in Nigeria were compared. Using Nigerian Bottling Company (NBC) Plc as a case study, Twenty – Nine (29) Years financial statements (1980-2009) were analyzed and the relationships between these variables were compared using regression analysis.  It was found out that there is a relationship amongst these variables in NBC PLC.  This paper thereafter, suggests that rather than abandon EOQ for JIT, they should complement each other for effective inventory management and ultimately lead to profit maximization. Keywords: Economic Order Quantity (EOQ), EOQ Variables, Just In Time (JIT), Nigerian Bottling Company Plc and Regression Analysis

Base-stock policies with reservations

All intensively studied and widely applied inventory control policies satisfy demand in accordance with the First-Come-First-Served (FCFS) rule, whether this demand is in backorder or not. Interestingly, this rule is sub-optimal when the fill-rate is constrained or when the backorder cost structure includes fixed costs per backorder and costs per backorder per unit time. In this paper we study the degree of sub-optimality of the FCFS rule for inventory systems controlled by the well-known base-stock policy. As an alternative to the FCFS rule, we propose and analyze a class of generalized base-stock policies that reserve some maximum number of items in stock for future demands, even if backorders exist. Our analytic results and numerical investigations show that such alternative stock reservation policies are indeed very simple and considerably improve either the fillrate or reduce the total cost, without having much effect on the backorder level

Diseño y desarrollo de un modelo y planificación óptima para la responsabilidad de la cadena de suministro con el medio ambiente

La gestión responsable de los flujos de retorno de productos en entornos de producción e inventario es un requisito cada vez mayor para las empresas. Esto puede atribuirse a motivaciones económicas, ambientales y / o regulatorias. El modelado matemático detales sistemas ha ayudado a los procesos de toma de decisiones y ha proporcionado una mejor comprensión del comportamiento de dichos entornos de producción e inventario. Este artículo revisa la literatura sobre el modelado de sistemas de inventario de logística inversa que se basan en la orden económica / cantidad de producción (EOQ / EPQ) y la configuración del tamaño de lote económico conjunto (JELS) para analizar sistemáticamente las matemáticas involucradas en la captura de las principales característicasde los procesos relacionados. La literatura se examina y clasifica de acuerdo con los problemas específicos que se enfrentan y los supuestos del modelo. Se presta especial atención a las cuestiones ambientales. Hay indicios de la necesidad de que las matemáticas de los modelos de logística inversa sigan las tendencias actuales en los modelos de cadena de suministro y inventario "ecológicos". La modelización de la eliminación de residuos, las emisiones de gases de efecto invernadero y el consumo de energía durante la producción se considera la prioridad más urgente para el futuro de los modelos de logística inversa. Se presenta un ejemplo ilustrativo para modelar modelos de inventario de logística inversa con implicaciones ambientale

Diseño y desarrollo de un modelo y planificación óptima para la responsabilidad de la cadena de suministro con el medio ambiente

The responsible management of product return flows in production and inventory environments is a rapidly increasing requirement for companies. This can be attributed to economic, environmental and/or regulatory motivations. Mathematical modeling of such systems has assisted decision-making processes and provided a better understanding of the behavior of such production and inventory environments. This paper reviews the literature on the modeling of reverse logistics inventory systems based on the economic order/production quantity (EOQ/EPQ) and the joint economic lot size (JELS) settings to systematically analyze the mathematics involved in capturing the main characteristics of related processes. The literature is surveyed and classified according to the specific issues faced and modeling assumptions. Special attention is given to environmental issues. There are indications of the need for reverse logistics models' mathematics to follow current trends in ‘greening’ inventory and supply-chain models. The modeling of waste disposal, greenhouse-gas emissions, and energy consumption during production is considered as the most pressing priority for the future of reverse logistics models. An illustrative example for modeling reverse logistics inventory models with environmental implications is presented.La gestión responsable de los flujos de retorno de productos en entornos de producción e inventario es un requisito cada vez mayor para las empresas. Esto puede atribuirse a motivaciones económicas, ambientales y / o regulatorias. El modelado matemático de tales sistemas ha ayudado a los procesos de toma de decisiones y ha proporcionado una mejor comprensión del comportamiento de dichos entornos de producción e inventario. Este artículo revisa la literatura sobre el modelado de sistemas de inventario de logística inversa que se basan en la orden económica / cantidad de producción (EOQ / EPQ) y la configuración del tamaño de lote económico conjunto (JELS) para analizar sistemáticamente las matemáticas involucradas en la captura de las principales características de los procesos relacionados. La literatura se examina y clasifica de acuerdo con los problemas específicos que se enfrentan y los supuestos del modelo. Se presta especial atención a las cuestiones ambientales. Hay indicios de la necesidad de que las matemáticas de los modelos de logística inversa sigan las tendencias actuales en los modelos de cadena de suministro y inventario "ecológicos". La modelización de la eliminación de residuos, las emisiones de gases de efecto invernadero y el consumo de energía durante la producción se considera la prioridad más urgente para el futuro de los modelos de logística inversa. Se presenta un ejemplo ilustrativo para modelar modelos de inventario de logística inversa con implicaciones ambientales

A Mutual Catastrophe Insurance Framework for Horizontal Collaboration in Prepositioning Strategic Reserves

We develop a mutual catastrophe insurance framework for the prepositioning of strategic reserves to foster horizontal collaboration in preparedness against low-probability high-impact natural disasters. The framework consists of a risk-averse insurer pooling the risks of a portfolio of risk-averse policyholders. It encompasses the operational functions of planning the prepositioning network in preparedness for incoming insurance claims, in the form of units of strategic reserves, setting coverage deductibles and limits of policyholders, and providing insurance coverage to the claims in the emergency response phase. It also encompasses the financial functions of ensuring the insurer’s solvency by efficiently managing its capital and allocating yearly premiums among policyholders. We model the framework as a very large-scale nonlinear multistage stochastic program, and solve it through a Benders decomposition algorithm. We study the case of Caribbean countries establishing a horizontal collaboration for hurricane preparedness. Our results show that the collaboration is more effective when established over a longer planning horizon, and is more beneficial when outsourcing becomes expensive. Moreover, the correlation of policyholders affected simultaneously under the extreme realizations and the position of their claims in their global claims distribution directly affects which policyholders get deductibles and limits. This underlines the importance of prenegotiating policyholders’ indemnification policies at the onset of collaboration

Instability of Dynamic Inventory Systems

We show in this paper that instability is an intrinsic cause of production variability in a dynamic inventory system. We first show that a unique stationary optimal policy exists for both full-backlog and lost-sales case and under the policy a firm replenishes its inventory to a constant target level. We then express the constant inventory target as the unique steady state of the Euler’s equation governing the dynamics of target inventories. We finally show that the Euler’s equation is locally instable at the steady state but a sufficiently large refund to unsold inventory in lost-sales case can stabilize the inventory system.stability, production variability, dynamic inventory system, full-backlog, lost-sales