Joint optimization of process improvement investments for supplier-buyer cooperative commerce

This research focuses on supporting the formation of strategic alliances through the concept of cooperative commerce, where suppliers and buyers work together to jointly optimize their businesses. The general goal of this research is to examine existing cooperative commerce models for obstacles that would hinder their successful implementation into modern industrial applications and to address those shortcomings. Total annual cost equations are formulated to capture the joint total relevant cost of cooperative commerce business relationships. These total joint relevant cost models will include terms that capture the ordering cost, holding cost, and cost of quality, as well as any applicable investment cost for process improvements, consistent with traditional economic order quantity and economic production quantity theory. This research corrects a modeling error of Affisco, et al. (2002) that led to underestimating the effectiveness of process improvements in joint economic lot size models. In addition, the models are expanded to accommodate a full range of product quality inspection policies, from zero to one hundred percent product inspections. Furthermore, the models are modified to account for the cost of scrap generation, as well as the effects of accepting non-conforming product and rejecting conforming product during quality inspections. Once the total cost models are expanded to account for these neglected costs, the joint total relevant cost equations are minimized to find the optimal batch sizes, and the effects of each model extension on the model solution are studied. Results indicate that these extensions do have a significant impact on the model results, such as reduced optimal batch sizes and increased optimal fraction conforming product

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

Impacts of collaborative investment and inspection policies on the integrated inventory model with defective items

[[abstract]]For an imperfect production system, to reduce quality-related costs, a manager may consider investing capital in quality improvement. In general, the investment expense in reducing the defective rate of items is often paid by the vendor. On the other hand, the buyer may inspect the product quality as the order is received which implies it incurs an inspection cost. In a supply chain integrated system, to accomplish global optimisation, the vendor and buyer can agree to jointly invest capital to improve the imperfect production processes, and the buyer can remove the inspection programme as the defective rate reaches a certain low-level. Hence, this paper investigates the impacts of collaborative investment and inspection policies on an integrated inventory model with defective items. The objective of this study is to seek the optimal order quantity, shipping times from the vendor to the buyer per production run, and the defective rate that minimise the joint total cost per unit time. An algorithm is developed to find the optimal solution. Several numerical examples are presented to demonstrate the proposed model and solution procedure, and then several management insights are obtained from the numerical examples.[[incitationindex]]SCI[[incitationindex]]EI[[booktype]]紙

THE LOGISTICAL COSTS OF MARKETING IDENTITY PRESERVED WHEAT

This study examines prospective additional costs associated with identity preserved (IP) transactions and their allocation among participants in the wheat marketing system (farmers, grain handlers, and millers). Cost allocations for participants are computed across a range of potential specifications for IP transactions. As strategies become more specific (moved toward either location, variety, or variety and location), the probability of lots meeting quality specifications for the desired end-use characteristic (absorption) generally increased and changes in costs for mills declined. The exception is for strategies that include varieties which involve a premium paid by millers. As strategies become more specific, higher economic costs are imposed on shippers. These economic costs are substantial and provide incentives for shippers to develop techniques that would allow segregation of lots based on quality to recapture this unrealized value. The other change in costs among participants is the shifting of revenue to farmers from mills for variety specific strategies. This analysis indicates that when the desired quality characteristic is absorption, premiums paid for specific varieties quickly offset any reduction in procurement costs achieved by mills.identity preserved, wheat, quality, growers, grain handlers, end-users, Crop Production/Industries,

Cost systems -- operating value

Mr. Mixter in his address to our Annual Convention tore the veil of mystery from cost operations in the factory and placed before us with remarkable clearness the way to make a cost system our servant for efficiency and profit. Too often to our loss and detriment have we viewed Cost Systems as clerical operations for the gathering of records and statistics, but he has shown that only by arranging each factory department in an orderly manner and with a reasonable amount of record keeping can the best results be obtained. In these days of rapidly fluctuating material costs and changing overhead expenses, neither the running of test quantities nor the annual inventory can be relied on to measure profit or loss, we must know all the time whether we are gaining or losing on every article we produce. Mr. Mixter\u27s ripe experience, gained in managing the plants of Deere & Co., equips him to speak with unquestioned authority on this subject, and the association acknowledges its obligation to him for this valuable contribution to the helpful knowledge it seeks to impart to its members

Seven wastes elimination targeted by lean manufacturing case study “gaza strip manufacturing firms’’

The research paper aims to investigate and analyze the current situation of wastes elimination of the manufacturing firms in Gaza Strip and its important role for reducing the production cost; in addition it aims to promote lean thinking through studying the seven wastes that are targeted by the lean manufacturing philosophy. Wastes Relations Matrix (WRM) was implemented to analyze the effect of each waste on the other six wastes. The main findings are that lean manufacturing (wastes elimination) affects positively on reducing the production cost for the manufacturing business in Gaza strip

Service : the new focus in international manufacturing and trade

Major breakthroughs in communications technologies in the 1980s made it possible to monitor all phases of moving a product from raw material sourcing through processing to delivery to the customer. Close monitoring revealed major inefficiencies in the traditional set-up of materials acquisition, production, and distribution - especially large inventory holdings. At the same time, patterns of customer demand began to shift more rapidly, partly because of better communications networks. The need to reduce costs and become responsive to volatile changes in customer preferences forced businesses to substantially restructure their corporate practices. With domestic factor costs rising, manufacturers outsourced intermediate production to foreign enterprises in countries with lower wages. Merchants also sought cheaper supply sources - developments that held promise for developing countries. Many developing countries have been unable to take advantage of structural changes in world manufacturing and trade because they have been unable to deliver the quality of production, fast turnaround, and reliability of delivery manufacturing businesses need to keep up with changing market demand. A new management approach - logistics management - is needed to cut business costs and to be more responsive to rapidly changing markets. Logistics management orchestrates materials acquisition, production, and marketing to reduce inventories to a minimum. Effective logistics management enables many organizations to conduct their business with less than a week's worth of supplies. Such a radical change requires major corporate restructuring and the development of strategic alliances with service providers. Outsourcing of production is projected to continue growing, and the search for less costly supply sources will continue. Developing countries can capitalize on those trends - but only if they substantially improve their infrastructure, liberalize their regulations, and begin to apply modern logistics management techniques. If they do not, their outlook is not promising.Transport and Trade Logistics,Common Carriers Industry,Business in Development,Business Environment,Environmental Economics&Policies

Throughput and Yield Improvement for a Continuous Discrete-Product Manufacturing System

A seam-welded steel pipe manufacturing process has mainly four distinct major design and/or operational problems dealing with buffer inventory, cutting tools, pipe sizing and inspection-rework facility. The general objective of this research is to optimally solve these four important problems to improve the throughput and yield of the system at a minimum cost. The first problem of this research finds the optimal buffer capacity of steel strip coils to minimize the maintenance and downtime related costs. The total cost function for this coil feeding system is formulated as a constrained non-linear programming (NLP) problem which is solved with a search algorithm. The second problem aims at finding the optimal tool magazine reload timing, magazine size and the order quantity for the cutting tools. This tool magazine system is formulated as a mixed-integer NLP problem which is solved for minimizing the total cost. The third problem deals with different type of manufacturing defects. The profit function of this problem forms a binary integer NLP problem which involves multiple integrals with several exponential and discrete functions. An exhaustive search method is employed to find the optimum strategy for dealing with the defects and pipe sizing. The fourth problem pertains to the number of servers and floor space allocations for the off-line inspection-rework facility. The total cost function forms an integer NLP structure, which is minimized with a customized search algorithm. In order to judge the impact of the above-mentioned problems, an overall equipment effectiveness (OEE) measure, coined as monetary loss based regression (MLBR) method, is also developed as the fifth problem to assess the performance of the entire manufacturing system. Finally, a numerical simulation of the entire process is conducted to illustrate the applications of the optimum parameters setting and to evaluate the overall effectiveness of the simulated system. The successful improvement of the simulated system supports this research to be implemented in a real manufacturing setup. Different pathways shown here for improving the throughput and yield of industrial systems reflect not only to the improvement of methodologies and techniques but also to the advancement of new technology and national economy