The boomerang returns? Accounting for the impact of uncertainties on the dynamics of remanufacturing systems

Recent years have witnessed companies abandon traditional open-loop supply chain structures in favour of closed-loop variants, in a bid to mitigate environmental impacts and exploit economic opportunities. Central to the closed-loop paradigm is remanufacturing: the restoration of used products to useful life. While this operational model has huge potential to extend product life-cycles, the collection and recovery processes diminish the effectiveness of existing control mechanisms for open-loop systems. We systematically review the literature in the field of closed-loop supply chain dynamics, which explores the time-varying interactions of material and information flows in the different elements of remanufacturing supply chains. We supplement this with further reviews of what we call the three ‘pillars’ of such systems, i.e. forecasting, collection, and inventory and production control. This provides us with an interdisciplinary lens to investigate how a ‘boomerang’ effect (i.e. sale, consumption, and return processes) impacts on the behaviour of the closed-loop system and to understand how it can be controlled. To facilitate this, we contrast closed-loop supply chain dynamics research to the well-developed research in each pillar; explore how different disciplines have accommodated the supply, process, demand, and control uncertainties; and provide insights for future research on the dynamics of remanufacturing systems

An integrated pricing and deteriorating model and a hybrid algorithm for a VMI (vendor-managed-inventory) supply chain

This paper studies a vendor-managed-inventory (VMI) supply chain where a manufacturer, as a vendor, procures a type of nondeteriorating raw material to produce a deteriorating product, and distribute it to multiple retailers. The price of the product offered by one retailer is also influenced by the prices offered by other retailers because consumers can choose the product from any of the retailers. This paper is one of the first papers that propose an integrated model to study the influence of pricing and deterioration on the profit of such a VMI system. A hybrid approach combining genetic algorithms and an analytical method is developed for efficiently determining the optimal price of the product of each retailer, the inventory policies of the product and the raw material. Our results of a detailed numerical study show that parameters related to the market and deterioration have significant influences on the profit of the VMI system. However, different from common intuition, we find that an increase in the substitution elasticity of the product among different retailers can bring an increase in the retail prices of the product, while the increase of the market scale can reduce the retail prices. © 2011 IEEE.published_or_final_versio

Minimizing food waste in grocery store operations: literature review and research agenda

Research on grocery waste in food retailing has recently attracted particular interest. Investigations in this area are relevant to address the problems of wasted resources and ethical concerns, as well as economic aspects from the retailer’s perspective. Reasons for food waste in retail are already well-studied empirically, and based on this, proposals for reduction are discussed. However, comprehensive approaches for preventing food waste in store operations using analytics and modeling methods are scarce. No work has yet systematized related research in this domain. As a result, there is neither any up-to-date literature review nor any agenda for future research. We contribute with the first structured literature review of analytics and modeling methods dealing with food waste prevention in retail store operations. This work identifies cross-cutting store-related planning areas to mitigate food waste, namely (1) assortment and shelf space planning, (2) replenishment policies, and (3) dynamic pricing policies. We introduce a common classification scheme of literature with regard to the depth of food waste integration and the characteristics of these planning problems. This builds our foundation to review analytics and modeling approaches. Current literature considers food waste mainly as a side effect in costing and often ignores product age dependent demand by customers. Furthermore, approaches are not integrated across planning areas. Future lines of research point to the most promising open questions in this field

Dampening variability by using smoothing replenishment rules.

A major cause of supply chain deficiencies is the bullwhip effect which can be substantial even over a single echelon. This effect refers to the tendency of the variance of the replenishment orders to increase as it moves up a supply chain. Supply chain managers experience this variance amplification in both inventory levels and replenishment orders. As a result, companies face shortages or bloated inventories, run-away transportation and warehousing costs and major production adjustment costs. In this article we analyse a major cause of the bullwhip effect and suggest a remedy. We focus on a smoothing replenishment rule that is able to reduce the bullwhip effect across a single echelon. In general, dampening variability in orders may have a negative impact on customer service due to inventory variance increases. We therefore quantify the variance of the net stock and compute the required safety stock as a function of the smoothing required. Our analysis shows that bullwhip can be satisfactorily managed without unduly increasing stock levels to maintain target fill rates.Bullwhip effect; Companies; Cost; Costs; Impact; Inventory; Managers; Order; Replenishment rule; Rules; Safety stock; Supply chain; Supply chain management; Variability; Variance; Variance reduction;

Analysis of the revenue-sharing contract under different power structures with application in the biodiesel niche market

Master'sMASTER OF ENGINEERIN

An Integrated Lot-size Model of Deteriorating Item for one Vendor and Multiple Retailers Considering Market Pricing Using Genetic Algorithm

In this paper, we propose a model to study influence of pricing and deteriorating rate on the supply chain level net profit and total inventory where genetic algorithm is used for determine the optimal solution. A one-vendor and multi-retailer supply chain for a single deteriorating finished product and raw materials is analyzed. Under the proposed strategy, the vendor buys a non-deteriorating materials to vendor a deteriorating finished product, delivers the finished product to all retailers by common replenishment periods based on VMI (vendor managed inventory) being implemented. All retailers who buy the finished product sell the finished product on their markets. In all of these markets, the finished product in different markets has substitution each other since consumers may have opportunity to buy the finished product from different retailer and Cobb-Douglas demand function is introduced to describe this market attribute. After developing an integrated product-inventory-marketing model for deteriorating product, genetic algorithm is conducted to calculate the optimal pricing and inventory policies. Finally we present the results of a detailed numerical study that analyses the market and deteriorating rate related parameters influence on the supply chain level net profit and inventory level

Deterministic and stochastic optimal inventory control with logistic stock-dependent demand rate

It has been suggested by many supply chain practitioners that in certain cases inventory can have a stimulating effect on the demand. In mathematical terms this amounts to the demand being a function of the inventory level alone. In this work we propose a logistic growth model for the inventory dependent demand rate and solve first the continuous time deterministic optimal control problem of maximising the present value of the total net profit over an infinite horizon. It is shown that under a strict condition there is a unique optimal stock level which the inventory planner should maintain in order to satisfy demand. The stochastic version of the optimal control problem is considered next. A bang-bang type of optimal control problem is formulated and the associated Hamilton-Jacobi-Bellman equation is solved. The inventory level that signifies a switch in the ordering strategy is worked out in the stochastic case. Copyright © 2014 Inderscience Enterprises Ltd