Using supply chain management techniques to make wind plant and energy storage operation more profitable

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2009.Includes bibliographical references (leaves 161-164).Our research demonstrates that supply chain management techniques can improve the incremental gross profits of wind plant and storage operations by up to five times. Using Monte-Carlo simulation we create and test scenarios that achieve incremental operating profits of up to 15 percent of base case revenue, and show pre-tax profit. We show that energy storage-specifically in the form of utility-scale batteries - can become economically-viable today when using supply chain management strategies under certain scenarios. To achieve these results we have built a simulation model with three data inputs. First, we synthesized the output of a 120 MW wind plant in Maine for both summer and winter seasons. Second, we simulated New England ISO market pricing data for both the Day-Ahead and Real-Time markets in summer and winter seasons using Monte Carlo simulations. Third, using actual data from two existing battery companies, we incorporated the technical and cost specifications for two energy storage facilities. All of these data inputs feature adjustable parameters so we can test various plant configurations, market volatilities and storage capabilities, among other inputs. Using our model, we then employed supply chain management network design strategies and daily operating policies to test profitability improvements on our wind plant-plus-storage operation. For example, we ran simulations for scenarios where our storage facility is either located in Maine next to our wind plant, or located in another state.(cont.) Also, since storage can make wind generation a predictable capacity resource, we ran simulations to test results in both the Day-Ahead and Real-Time markets. In addition we developed four (4) inventory management policies with dynamic input (charge) and output (discharge) strategies for our storage units. For each policy, we had to conceptualize the policy - while considering planning horizon, lead time, holding costs, shortage costs, market pricing and storage capabilities - and then build functionality in our model to execute those strategies in dynamic pricing and wind plant output environments. The outcomes of our simulation model include incremental gross profit, operating profit and pre-tax profit for each of 54 scenarios, as well as 11 management insights for wind plant and storage operators, storage technology manufacturers and New England ISO leadership.by Prashant Saran and Clayton W. Siegert.M.Eng.in Logistic

Combined Pricing and Portfolio Option Procurement

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/90569/1/poms1255.pd

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

The Need for Transparency in Commodity and Commodity Derivatives Markets. ECMI Research Report No. 3, 15 December 2008

This paper argues that transparency-boosting measures specifically tailored to commodity and commodity derivatives markets are much needed. In particular, encouraging the creation of a clearing infrastructure for OTC commodity and commodity derivatives markets would be desirable. Moreover, EU regulators should consider setting up a new, more effective market abuse regime aimed at preventing manipulation in both the physical and financial commodities markets. Finally, in cooperation with the G20, EU authorities should consider the creation of an International Commodity Agency to increase transparency and restore confidence in international physical markets for commodities. The paper is structured as follows: Section 2 briefly discusses the fundamentals of commodity spot and futures markets. Section 3 presents both physical commodity markets and commodity derivative markets in their usual breakdown categories: agriculture, metals and energy. Section 4 discusses the regulations in the EU and the US concerning commodity derivatives. Section 5 advances certain policy proposals and the last section draws the conclusions

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

Master'sMASTER OF ENGINEERIN

Framework for Evaluation of Strategies for Pooling of Repairable Spare Parts

Background: The ability to quickly provide parts for the supply of advanced technical systems in equipment-intensive industries (such as airlines and nuclear power plants) is critical to the systems overall performance. In order to maintain a targeted system availability large quantities of spare parts are often required which in turn results in excessive inventory costs. Seeing as inventory systems often account for a large proportion of a business‟ costs a tough issue faced by companies in these industries is how to reduce the total inventory cost without having a negative impact on the system availability. An approach that may successfully deal with such a problem is pooling. Pooling refers to an arrangement in which multiple owners of the same type of technical systems cooperate by sharing their inventories. Purpose: The theoretical purpose of the thesis is to emphasize different pooling strategies and to identify and assess the characteristics of the strategies. The practical purpose of the thesis is to develop a robust method that facilitates a fair comparison of considered strategies. The objective is thus to develop a generic model that evaluates soft values (here, referred to as soft aspects) for each strategy, and also, to put the soft aspects in relation to the annual cost of a strategy in a final model. iv Methodology: The initial phase of the thesis was dedicated to a desk study review of current literature within the field of study. Recently published scientific articles, papers authored by consultants at Systecon, and literature used in courses at the Faculty of Engineering at Lund University lay the basis for the theoretical framework. The framework developed is derived from discussions with the supervisors in connection with interviews carried out with; relevant Systecon customers and company representatives at two trade fairs, Offshore Wind 2009 and Nordic Rail 2009. Conclusion: This thesis presents a framework for evaluation of strategies (stand alone, ad hoc cooperation, cooperative pooling, and commercial pooling) for pooling of repairable spare parts. Characteristics of all strategies are emphasized and assessed. From the characteristics, which are provided in Table 5.3, a model to evaluate soft values of each strategy is derived. The model, named evaluation of soft values, is provided in Table 5.4 and Table 5.5. Also, a methodical approach to derive a final strategy is provided in section 5.7. To make sure that a decision-maker is well aware of how the model should be applied, a fictitious case study is build up in where every step of the decision making process is thoroughly described. Furthermore, in the case study a final model that facilitates the derivation of a best strategy is presented. By means of a specified weighting coefficient and properly chosen set of scales, the final model provides with a final strategy. The outcome of the final model is based on the outcomes of the cost models and the outcomes of the evaluation of soft values model

Investigation On The Influence Of Remanufacturing On Production Planning And Control – A Systematic Literature Review

Production planning and control (PPC) is one of the focal operational tasks of a company, and it is used to design logistics services in a target-orientated manner so that individual customer requirements can be fulfilled. However, existing PPC framework models are still based on the prevailing linear economic procedure (take - make - dispose). Due to customers' increasing interest in sustainability and growing regulatory pressure, the Circular Economy (CE) meets these changing conditions by closing material cycles, improving resource efficiency and extending product life cycles. However, for a company to guarantee a high logistics performance, the operational PPC must be adapted to this new economic model. To this end, it needs to be investigated whether and how the adaptation of circular strategies influences existing PPC processes. This paper focuses on the circular strategy of remanufacturing and its influence on different PPC-main tasks. The latter will be examined using a systematic literature review. Finally, the results of this analysis are compared with the Hanoverian Supply Chain Model as a PPC framework model. This comparison shows which PPC tasks are affected and which existing approaches have already been developed. Ultimately, these results provide the basis for developing a framework model for operational PPC regarding the CE