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

Trade Credit Policies for Supplier, Manufacturer, and Retailer: An Imperfect Production-Inventory System with Rework

In this study, we developed a trade credit policy for a three-layer supply chain consisting of a supplier, a manufacturer and a retailer. We propose an optimal production rate and selling price for the manufacturer and the retailer under an imperfect production system. The suggested coordination policy optimizes the profit of each supply chain member. Two models were formulated for two real-life strategies respectively. The first one is a collaborative (integrated) system and the second one is a Stackelberg leadership system. Both strategies were analyzed for various credit periods, respectively offered by the supplier to the manufacturer, by the manufacturer to the retailer, and by the retailer to the customers, by considering price-sensitive demand and a certain replenishment rate. Finally, we concluded which strategy will be better for inventory management under the given restrictions in the form of propositions. The concavity property for the net profit function was established with respect to the selling price and the production rate, which was also described graphically and analyzed by numerical examples

Trade Credit Policies for Supplier, Manufacturer, and Retailer: An Imperfect Production-Inventory System with Rework

In this study, we developed a trade credit policy for a three-layer supply chain consisting of a supplier, a manufacturer and a retailer. We propose an optimal production rate and selling price for the manufacturer and the retailer under an imperfect production system. The suggested coordination policy optimizes the profit of each supply chain member. Two models were formulated for two real-life strategies respectively. The first one is a collaborative (integrated) system and the second one is a Stackelberg leadership system. Both strategies were analyzed for various credit periods, respectively offered by the supplier to the manufacturer, by the manufacturer to the retailer, and by the retailer to the customers, by considering price-sensitive demand and a certain replenishment rate. Finally, we concluded which strategy will be better for inventory management under the given restrictions in the form of propositions. The concavity property for the net profit function was established with respect to the selling price and the production rate, which was also described graphically and analyzed by numerical examples

Credit policies : lessons from East Asia

Directed credit programs were a major tool of development in the 1960s and 1970s. In the 1980s, their usefulness was reconsidered. Experience in most countries showed that they stimulated capital-intensive projects, that preferential funds were often (mis)used for nonpriority purposes, that a decline in financial discipline led to low repayment rates, and that budget deficits swelled. Moreover, the programs were hard to remove. But Japan and other East Asian countries have long touted the merits of focused, well-managed directed credit programs, saying they are warranted when there is a significant discrepancy between private and social benefits, when invesment risk is too high on certain projects, and when information problems discourage lending to small and medium-size firms. The assumption underlying policy-based assistance and other forms of industrial assistance (such as lower taxes) is that the main constraint on new or expanding enterprises is limited to access to credit. The authors give an overview of credit policies in East Asian countries (China, Japan, and the Republic of Korea) as well as India, and summarize what these countries have learned about directed credit programs. Among the lessons: 1) Credit programs must small, narrowly focused, and of limited duration (with clear sunset provisions); 2) subsidies must be low to minimize distortion of incentives as well as the tax on financial intermediation that all such programs entail; 3) credit programs must be financed by long-term funds to prevent inflation and macroeconomic instability, recourse to central bank credit should be avoided except in the very early stages of development when the central bank's assistance can help jump-start economic growth; 4) they should aim at achieving positive externalities (or avoiding negative ones), any help to declining industries should include plans for their timely phaseout; 5) they should promote industrialization and export orientation in a competitive private sector with internationaly competitive operations; 6) they should be part of a credible vision of economic development that promotes growth with equity and should involve a long-term strategy to develop a sound financial system; 7) policy based loans should be channeled through well-capitalized, administratively capable financial institutions, professionally managed by autonomous managers; 8) they should be based on clear, objective, easily monitored criteria; 9) programs should aim for a good repayment record and few losses; and 10) they should be supported by effective mechanisms for communication and consultation between the public and private sectors, including the collection and dissemination of basic market information.Payment Systems&Infrastructure,Banks&Banking Reform,Environmental Economics&Policies,Financial Intermediation,Economic Theory&Research,Environmental Economics&Policies,Financial Intermediation,Economic Theory&Research,Housing Finance,Banks&Banking Reform

Cote d'Ivoire : private sector dynamics and constraints

Private sector assessments provide information and analysis essential to formulating strategies for alleviating constraints on private sector development. They are meant to contribute both to the Bank's policy dialogue with borrowing governments and to the formulation of country assistance strategies. Theauthors examine the constraints on growth faced by private enterprises and how these relate to the policy and institutional environment in Cote d'Ivoire. They employ new data sources as well as surveys of, and in-depth interviews with, private entrepreneurs. They focus on: the effects of taxes and labor regulation on private firms; the impact of public spending on private sector development; and the role of informality in enterprise activity. Following are some of their findings. Tax policy and enforcement impose a heavy financial burden on a shrinking base of formal enterprises, whose regulatory burden has also grown. Taxes are increasingly independent of a firm's profits. This substantial fixed cost may lead some businesses to exit prematurely and may discourage others from formal entry. The overall tax burden on small and medium-size enterprises has risen disproportionately, to levels that discourage formal participation in the economy. Informal firms pay some taxes, but there is considerable leakage in collection. Unnecessary rigidities in labor policies weigh less heavily than expected on firms, because they avoid their full costs through such means as subcontracting and apprenticeships. The restrictions nonetheless limit firms'flexibility of operation and ability to reward merit. In the 1980s, public spending increasingly channeled limited financial resources and human capital toward nondevelopment purposes, including poorly performing enterprises and elite-oriented services, precluding their use in the private sector. The methods of financing public spending (such as withholding taxes and accumulating arrears) have sharply curtailed the capital available to private enterprises. The public sector's dramatic accumulation of arrears and growing reputation as a bad customer are undermining the competitive private supply of goods and services to the government. Government employment policies attract many of the most qualified potential entrepreneurs and business professionals to governmentemployment. Rather than a sharp divide, there is a continuum between small informal and large formal firms. Some medium-size and large formal firms engage in informal behavior, and large firms sometimes lower their costs through links with informal firms - including purchases of inputs that have escaped regulation and taxes.Banks&Banking Reform,Environmental Economics&Policies,Public Sector Economics&Finance,Private Participation in Infrastructure,Microfinance

Institutional Requirements for Market-led Development in Latin America

This paper seeks to provide a systematized framework for the main ideas that have been developed by ECLAC concerning the effects that market-led reforms have had on labour, financial and technology markets. In order to explore these questions further, a research project has been undertaken by ECLAC with the sponsorship of the German Agency for Technical Cooperation (GTZ). The project deals with the institutional requirements for properly functioning financial, technology and labour markets. Particular attention is being devoted to the institutional forces affecting market access by traditionally excluded actors, such as small and medium-sized enterprises (SMEs) in the case of long-term financial and technology markets, poor households in the case of housing finance, and female workers in the case of the labour market. As a consequence of the market-led reforms, Latin America has transformed its pattern of development and the way in which its brand of capitalism is configured. At the same time, the reform process is shown to have yielded unsatisfactory results when the performance level achieved in each factor market is evaluated. Labour markets exhibit a range of difficulties in reducing unemployment and informal employment. Financial markets are characterized by concentration and by the increasing difficulties encountered by the weaker agents in accessing resources. And, in most of the economies in the region, the role played by technology markets in creating and diffusing technology domestically is being downgraded. This poor performance has co-evolved along with a reduction in the State’s participation in the economy and an increasing power asymmetry in favour of private agents. The above difficulties seem to be related to the persistence of various types of market failures and the lack of non-market institutions capable of strengthening and supporting the operation of factor markets. The persistence of imperfect information, the lack of initial entitlements and gaps in learning capabilities have hindered the adaptation of various actors to the discipline of a new macro policy and incentive regime. Because of these underlying weaknesses in the institutional fabric inherited by the region, its factor markets have functioned very imperfectly and have failed to deliver what was expected of them in terms of a better long-term overall performance.Institutions; Development; Latin America

A Lot Sizing Model for a Deteriorating Product with Shifting Production Rates, Freshness, Price, and Stock-Dependent Demand with Price Discounting

Many production systems need to be able to change the rate at which they manufacture products for various reasons, hence, the need to find the optimal lot size under these multiple levels of production. This research addresses the need for optimizing inventory in a system with a shifting production rate and other challenging product characteristics such as product deterioration with limited life span, and product demand that is dependent on the stock level, the state of freshness of the product, and the selling price. The product also needs to be discounted as it gets close to the expiry date in order to boost demand and prevent wastage beyond its life span. Our objective is to maximize profit by determining the optimal selling price and inventory cycle time by deriving the relevant equations for these decision variables. The Newton-Raphson method was used to numerically solve for the optimal values of these variables. Sensitivity analyses were performed to derive useful insights for managerial decision-making