Operational planning of supply chains in a production and distribution center with just-in-time delivery

Purpose: A supply chain consists of raw material suppliers, manufacturers and retailers where inventory of raw materials and finished goods are involved, respectively. Therefore, it is important to find optimal solutions, which are beneficial for both supplier, manufacturer and retailer. Design/methodology/approach: This research focuses on a semi-continuous manufacturing facility by assuming that the production of succeeding cycle starts immediately after the production of preceding cycle. In reality, the inventory of a supply chain system may not be completely empty. A number of products may be left over after the deliveries are made. These leftover inventories are added to the next shipment after the production of required amount to make up a complete batch for shipment. Therefore, it is extremely important to search for an optimal strategies for these types production facilities where leftover finished goods inventory remains after the final shipment in a production cycle. Considering these scenarios, an inventory model is developed for an imperfect matching condition where some finished goods remains after the shipments. Findings: Based on the previous observation, this research also considers a single facility that follows JIT delivery and produces multiple products to satisfy customers’ demand. For this problem a rotational cycle model is developed to optimize the facility operations. Both problems are categorized as mixed integer non-linear programming problems which are to be solved to find optimum number of orders, shipments and rotational cycle policy for multiple products. Also, this solution will lead to estimate the optimum production quantity and minimum total system cost. Research limitations: This research considers the supply chain based on manufacturers point of view and it does not consider the transportation cost associated with supply chain. Next study will be focused on issues with joint decision making, information sharing, and transportation decision. Practical implications: This study will help the managers of refinery and paper industries in making their operation smooth by applying optimizing techniques and robust decision making. Originality/value: Based on the literature, no research was found on continuous production system supply chain and its optimization with JIT delivery. This research will definitely provide a direction for such problem to the researchers.Peer Reviewe

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

Punishment and Dispute Settlement in Trade Agreements.

This paper interprets dispute settlement procedures and punishments as responses to the fact that trade agreements are incomplete contracts. If no weight is given to the adjudication phase and if the degree of trade relatedness is known with certainty, the negotiated trade agreement will feature commensurate punishments, will induce violation of the dispute settlement ruling, and will deliver optimal liberalization and optimal unilateral trade-related action. With the adjudication phase of concern, the trade agreement will feature less liberalization, but still with a presumption of at least approximate commensurate punishment. The optimal trade agreement will likely induce abiding by the ruling when negotiators attach more importance to the adjudication phase, and violating it when they attach less.

Theory and Practice of Supply Chain Synchronization

In this dissertation, we develop strategies to synchronize component procurement in assemble-to-order (ATO) production and overhaul operations. We focus on the high-tech and mass customization industries which are not only considered to be very important to create or keep U.S. manufacturing jobs, but also suffer most from component inventory burden. In the second chapter, we address the deterministic joint replenishment inventory problem with batch size constraints (JRPB). We characterize system regeneration points, derive a closed-form expression of the average product inventory, and formulate the problem of finding the optimal joint reorder interval to minimize inventory and ordering costs per unit of time. Thereafter, we discuss exact solution approaches and the case of variable reorder intervals. Computational examples demonstrate the power of our methodology. In the third chapter, we incorporate stochastic demand to the JRPB. We propose a joint part replenishment policy that balances inventory and ordering costs while providing a desired service level. A case study and guided computational experiments show the magnitudes of savings that are possible using our methodology. In the fourth chapter, we show how lack of synchronization in assembly systems with long and highly variable component supply lead times can rapidly deteriorate system performance. We develop a full synchronization strategy through time buffering of component orders, which not only guarantees meeting planned production dates but also drastically reduces inventory holding costs. A case study has been carried out to prove the practical relevance, assess potential risks, and evaluate phased implementation policies. The fifth chapter explores the use of condition information from a large number of distributed working units in the field to improve the management of the inventory of spare parts required to maintain those units. Synchronization is again paramount here since spare part inventory needs to adapt to the condition of the engine fleet. All needed parts must be available to complete the overhaul of a unit. We develop a complex simulation environment to assess the performance of different inventory policies and the value of health monitoring. The sixth chapter concludes this dissertation and outlines future research plans as well as opportunities

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

Two-Echelon Inventory Optimization for Imperfect Production System under Quality Competition Environment

This paper develops two integrated optimization models of two-echelon inventory for imperfect production system under quality competition environment, in which the vendor’s production process is assumed to be imperfect, and JIT delivery policy is implemented to ship product from the vendor to the buyer. In the first model, product defect rate is fixed, and, in the second model, quality improvement investment is function of defect rate. The optimal policies of ordering quantity of buyer and shipment from vendor to buyer are obtained to minimize the expected annual total cost of vendor and buyer. Numerical examples are used to demonstrate the effectiveness and feasibility of the models. Sensitivity analysis is taken to analyze the impact of demand, production rate, and defect rate on the solution. Implications are highlighted in that both the vendor and the buyer can benefit from the vendor’s investing in quality improvement

National technology policies and international friction: Theory, evidence, and policy options

Economic theory and empirical evidence suggest that governments might usefully intervene in high-technology competition in two ways: First, they could act as a neutral agent that creates the necessary credibility, commitment and mutual trust among private companies so as to facilitate cooperation in high-risk, high-volume R&D. Second, if — in view of the externalities involved — an element of subsidization is to be added, this could be done in a nondiscriminatory fashion. A favourable tax treatment of R&D expenditures may be the most appropriate tool to achieve this task. In practice, governments do engage in targeted industrial and technology policies, whether justified on economic grounds or not. As a consequence, the string of trade conflicts in hightech industries that began in the 1980s is unlikely to end in the near future, unless substantial reforms are undertaken in some crucial areas of the international trade order. Above all, appropriate reform steps should be made with a view to the regulations on (i) subsidies, (ii) structural impediments, and (iii) dumping and anti-dumping. To mitigate the frictions that arise from a subsidization of domestic firms, a new set of rules should be established. The rules should provide that all plans to grant or to alter existing subsidies are to be notified to and approved by the WTO. Moreover, all subsidies should be ranked according to their potential distortional effects on competition and trade. For each category, quantitative limits that constrain the provision of subsidies to a certain fraction of the subsidy base should be set. To facilitate further liberalization steps, a country should be allowed to exceed these limits, if a national subsidy program offers an open access to firms located in third markets. Besides restrictive business practices of private firms, government regulations and technical standards are the most important structural impediments to trade. Existing GATT Articles already offer a multilateral route to conflict resolution in cases of structural impediments. However, this route has not been used by complainants up to now. The so-called "non-violation" clause of Article 23 GATT provides access to a multilateral dispute settlement even if the defending country has not explicitly violated GATT rules. This route should be tested and, if necessary, improved. To reduce the potential for a protectionist abuse of existing anti-dumping regulations, explicit reference to the state of competition in the relevant exporting and importing country markets should be made in anti-dumping investigations. To meet specific anti-trust concerns in hightech competition — notably with respect to network externalities, systems leverage, standardization, and innovation cartels — one might consider adopting the Draft International Antitrust Code (DIAC) that has recently been proposed by an international group of legal experts. --