An Integrated Single Vendor-Buyer Stochastic Inventory Model with Partial Backordering under Imperfect Production and Carbon Emissions

This paper develops an integrated single vendor single buyer inventory model with imperfect quality and environmental impact. The demand during lead time is assumed to be stochastic and follows the normal distribution. An integrated system with controllable lead time and logarithmic investment to reduce the defective percentage is discussed in this model.100% error-free screening process is adopted by the buyer to separate defective and non-defective items. We assume that shortages are allowed and are partially backordered at the buyer’s end. Logistics management is the component of supply chain management that focusses on how and when to get raw materials, intermediate products and finished goods from their respective origins to their destinations.Thus, transportation play a major role in supply chain. As transportation increases, it affects the weather by the matter of carbon emission.The fixed and variable carbon emission cost for both vendor and buyer is considered. The prime motive is to determine the optimal policies regarding optimal order quantity, reorder point, lead time and the number of lots delivered in a production run by minimizing the expected total cost of the system. Finally, a numerical example is provided to demonstrate the model

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

Multi products single machine economic production quantity model with multiple batch size

In this paper, a multi products single machine economic order quantity model with discrete delivery is developed. A unique cycle length is considered for all produced items with an assumption that all products are manufactured on a single machine with a limited capacity. The proposed model considers different items such as production, setup, holding, and transportation costs. The resulted model is formulated as a mixed integer nonlinear programming model. Harmony search algorithm, extended cutting plane and particle swarm optimization methods are used to solve the proposed model. Two numerical examples are used to analyze and to evaluate the performance of the proposed model

Integrated supply chain inventory model with quality improvement involving controllable lead time and backorder price discount

For the past four decades the integrated vendor and buyer supply chain inventory model has been an interesting topic, but quality improvement of defective items in the integrated inventory model with backorder price discount involving controllable lead time has been rarely discussed. The aim of this paper is to minimize the total related cost in the continuous review model by considering the order quantity, reorder point, lead time, process quality, backorder price discount and number of shipment as decision variables. Moreover, we assume that an investment function is used to improve the process quality. The lead time demand follows a normal distribution. In addition, the buyer offers backorder price discount to motivate the customers for possible backorders. There are some defective items in the arrival lot, so its treatment is also taken in account in this paper. We develop an iterative procedure for finding the optimal values of decision variables and numerical example is presented to illustrate the solution procedure. Additionally, sensitivity analysis with respect to major parameters is also carried out

Efficient near-optimal procedures for some inventory models with backorders-lost sales mixture and controllable lead time, under continuous or periodic review

This paper considers a number of inventory models with backorders-lost sales mixture, stockout costs, and controllable lead time. The lead time is a linear function of the lot size and includes a constant term that is made of several components. These lot-size-independent components are assumed to be controllable. Both single- and double-echelon inventory systems, under periodic or continuous review, are considered. To authors knowledge, these models have never been previously studied in literature. The purpose of this paper is to analyse and optimize these novel inventory models. The optimization is carried out by means of heuristics that work on an ad hoc approximation of the cost functions. This peculiarity permits to exploit closed-form expressions that make the optimization procedure simpler and more readily applicable in practice than standard approaches. Finally, numerical experiments investigate the efficiency of the proposed heuristics and the sensitivity of the developed models

Responsible Inventory Models for Operation and Logistics Management

The industrialization and the subsequent economic development occurred in the last century have led industrialized societies to pursue increasingly higher economic and financial goals, laying temporarily aside the safeguard of the environment and the defense of human health. However, over the last decade, modern societies have begun to reconsider the importance of social and environmental issues nearby the economic and financial goals. In the real industrial environment as well as in today research activities, new concepts have been introduced, such as sustainable development (SD), green supply chain and ergonomics of the workplace. The notion of “triple bottom line” (3BL) accounting has become increasingly important in industrial management over the last few years (Norman and MacDonald, 2004). The main idea behind the 3BL paradigm is that companies’ ultimate success should not be measured only by the traditional financial results, but also by their ethical and environmental performances. Social and environmental responsibility is essential because a healthy society cannot be achieved and maintained if the population is in poor health. The increasing interest in sustainable development spurs companies and researchers to treat operations management and logistics decisions as a whole by integrating economic, environmental, and social goals (Bouchery et al., 2012). Because of the wideness of the field under consideration, this Ph.D. thesis focuses on a restricted selection of topics, that is Inventory Management and in particular the Lot Sizing problem. The lot sizing problem is undoubtedly one of the most traditional operations management interests, so much so that the first research about lot sizing has been faced more than one century ago (Harris, 1913). The main objectives of this thesis are listed below: 1) The study and the detailed analysis of the existing literature concerning Inventory Management and Lot Sizing, supporting the management of production and logistics activities. In particular, this thesis aims to highlight the different factors and decision-making approaches behind the existing models in the literature. Moreover, it develops a conceptual framework identifying the associated sub-problems, the decision variables and the sources of sustainable achievement in the logistics decisions. The last part of the literature analysis outlines the requirements for future researches. 2) The development of new computational models supporting the Inventory Management and Sustainable Lot Sizing. As a result, an integrated methodological procedure has been developed by making a complete mathematical modeling of the Sustainable Lot Sizing problem. Such a method has been properly validated with data derived from real cases. 3) Understanding and applying the multi-objective optimization techniques, in order to analyze the economic, environmental and social impacts derived from choices concerning the supply, transport and management of incoming materials to a production system. 4) The analysis of the feasibility and convenience of governmental systems of incentives to promote the reduction of emissions owing to the procurement and storage of purchasing materials. A new method based on the multi-objective theory is presented by applying the models developed and by conducting a sensitivity analysis. This method is able to quantify the effectiveness of carbon reduction incentives on varying the input parameters of the problem. 5) Extending the method developed in the first part of the research for the “Single-buyer” case in a "multi-buyer" optics, by introducing the possibility of Horizontal Cooperation. A kind of cooperation among companies in different stages of the purchasing and transportation of raw materials and components on a global scale is the Haulage Sharing approach which is here taken into consideration in depth. This research was supported by a fruitful collaboration with Prof. Robert W. Grubbström (University of Linkoping, Sweden) and its aim has been from the beginning to make a breakthrough both in the theoretical basis concerning sustainable Lot Sizing, and in the subsequent practical application in today industrial contexts

Modelling of Coordinating Production and Inventory Cycles in A Manufacturing Supply Chain Involving Reverse Logistics

In today’s global and competitive markets selling products at competitive prices, coordination of supply chain configuration, and environmental and ecological consciousness and responsibility become important issues for all companies around the world. The price of products is affected by costs, one of which is inventory cost. Inventory does not give any added value to products but must be kept in order to fulfill the customer demand in time. Therefore, this cost must be kept at the minimum level. In order to reduce the amount of inventory across a supply chain, coordination of decisions among all players in the chain is necessary. Coordination is needed not only for a two-level supply chain involving a manufacturer and its customers, but also for a complex supply chain of multiple tiers involving many players. With increasing attention being placed to environmental and ecological consciousness and responsibility, companies are keen to have a reverse supply chain where used products are collected and usable components remanufactured and reused in production to minimize negative impacts on the environment, adding further complexity to decision making across a supply chain. To deal with the above issues, this thesis proposes and develops the mathematical models and solution methods for coordinating the production inventory system in a complex manufacturing supply chain involving reverse logistics and multiple products. The supply chain consists of tier-2 suppliers for raw materials, tier-1 suppliers for parts, a manufacturer who manufactures and assembles parts into finished products, distributors, retailers and a third party who collects the used products and returns usable parts to the system. The models consider a limited contract period among all players, capacity constraints in transportation units and stochastic demand. The solution methods for solving the models are proposed based on decentralized, semi-centralized and centralized decision making processes. Numerical examples are used by adopting data from the literature to demonstrate, test, analyse and discuss the models. The results show that centralised decision making process is the best way to coordinate all players in the supply chain which minimise total cost of the supply chain as a whole. The results also show that the selection of the length of limited horizon/ contract period will be one of the main factors which will determine the type of coordination (decentralised, centralised or semi-centralised) among all players in the supply chain. We also found that the models developed can be viewed as generalised models for multi-level supply chain by examining the models using systems of different tiers from the literature. We conclude that the models are insensitive to changes of input parameters since percentage changes of the supply chain’s total cost are less than percentage changes of input parameters for the scenarios studied