74 research outputs found

    Sustainable Inventory Management Model for High-Volume Material with Limited Storage Space under Stochastic Demand and Supply

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    Inventory management and control has become an important management function, which is vital in ensuring the efficiency and profitability of a company’s operations. Hence, several research studies attempted to develop models to be used to minimise the quantities of excess inventory, in order to reduce their associated costs without compromising both operational efficiency and customers’ needs. The Economic Order Quantity (EOQ) model is one of the most used of these models; however, this model has a number of limiting assumptions, which led to the development of a number of extensions for this model to increase its applicability to the modern-day business environment. Therefore, in this research study, a sustainable inventory management model is developed based on the EOQ concept to optimise the ordering and storage of large-volume inventory, which deteriorates over time, with limited storage space, such as steel, under stochastic demand, supply and backorders. Two control systems were developed and tested in this research study in order to select the most robust system: an open-loop system, based on direct control through which five different time series for each stochastic variable were generated, before an attempt to optimise the average profit was conducted; and a closed-loop system, which uses a neural network, depicting the different business and economic conditions associated with the steel manufacturing industry, to generate the optimal control parameters for each week across the entire planning horizon. A sensitivity analysis proved that the closed-loop neural network control system was more accurate in depicting real-life business conditions, and more robust in optimising the inventory management process for a large-volume, deteriorating item. Moreover, due to its advantages over other techniques, a meta-heuristic Particle Swarm Optimisation (PSO) algorithm was used to solve this model. This model is implemented throughout the research in the case of a steel manufacturing factory under different operational and extreme economic scenarios. As a result of the case study, the developed model proved its robustness and accuracy in managing the inventory of such a unique industry

    The price of payment delay

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    Maximising the value of supply chain finance

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    Supply Chain Finance (SCF) arrangements aim to add value by taking a cooperative approach to financing the supply chain. Interest in SCF has been increasing, and decision makers need a comprehensive view of possible applications and their potential. By means of theoretical and empirical exploration, we develop a conceptual framework that allows for positioning of SCF concepts and practices. The framework is based on a delineation of four archetypal SCF policies and the criteria that are relevant for adoption of each policy. The two main contributions of our framework are: (1) it explicitly considers operational motives as well as the financial motives that could prompt a firm to engage financial cooperation; and (2) it uses a discounted cash flow approach to illustrate the trade-offs that arise from different risks in SCF implementations. We use the framework to review policies that have been used in reverse factoring, an SCF practice that has recently become popular. Our study reveals implications for all the parties involved in an SCF implementation

    Multi-objective optimisation of dynamic short-term credit portfolio selection :the adoption of third party logistics credit for financing working capital contrained small and medium sized enterprises in supply chains

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    PhD ThesisMany companies, especially small and medium sized enterprises, are faced with liquidity problems. The shortage of working capital in their businesses has prevented supply chains from achieving effectiveness and efficiency in management. Although they can access short-term loans from banks and suppliers, the willingness of these credit lenders to lend short-term capital is often restricted by the fact that they cannot monitor whether or how their customers will use the loans according to the agreements. In many cases, this fact makes it difficult for capitalconstrained companies to obtain sufficient working capital from existing funding sources. A business practice called Integrated Logistics and Financial Service has been developed, which can improve banks’ monitoring of how their loans will eventually be used via the alliance of third party logistics companies and banks. The emergence of credit offered by third party logistics companies (termed as 3PLC) provides more choices for working capital constrained companies. Following on traditional bank overdrafts and trade credit, the new 3PLC became the third type of credit available to short-term working capital constrained companies. A new issue arising from this situation is how a working capital constrained company can determine a credit portfolio from multiple working capital sources. Current studies of credit portfolio management are still silent in considering 3PLC. Moreover, limited studies have integrated credit portfolio management into material flow management in supply chains. In light of the aforementioned discussions, this thesis aims to optimise dynamic credit portfolio management in supply chains to achieve the different business objectives of working capital constrained companies. To achieve the above aims, this thesis firstly applies an analytic hierarchy process and linear programming model to optimise a single objective. It applies the analytic hierarchy process to evaluate the concerns of working capital-constrained companies in selecting credit. These concerns are identified through a thorough literature review focusing on the considerations of small and medium sized enterprises’ in borrowing short-term credit. The analytic hierarchy process has been applied to determine the priority of the identified concerns and the preferences of borrowers for bank overdrafts, trade credit and 3PLC. A linear programming model has been developed based on the results obtained from the analytic hierarchy process model. It determines the maximum borrowing amount for a given period from multiple credit sources. To reflect the complexity of working capital constrained companies borrowing credit, thisthesis has extended the model from single objective optimisation to multiple objectives optimisation. Consequently, a goal-programming model has been developed. This model provides the solution of optimizing two business objectives including overall cost and backorder penalty cost minimization. Numerical examples have been conducted to test and analyse all the mathematical models. This thesis contributes the following aspects: 1) the new 3PLC together with bank overdraft and trade credit have been considered into credit portfolio management; 2) borrower’s concerns and credit preferences relating to the three types of credit have been identified and evaluated; 3) mathematical models have been developed for credit portfolio selection over multiple periods

    Supply chain operation strategies and risk management with working capital consideration: a case study of the supply chain of lightning protection products in China

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    JEL: G32; D21With the advent of economic globalization, competition is increasingly hinged on supply chain. Meanwhile, working capital becomes a key element of a successful supply chain. This thesis researches the supply chain of a typical lightning protection products manufacturer in China, i.e. Company Z. The thesis starts with the working capital issues in the supply chain of Company Z; then, with the help of questionnaires and a sensible indicator system and weight assignments; analyzes and summarizes the status quo of the working capital and related key issues in the supply chain consisting of Company Z and its suppliers and customers. Building on such analysis, a two-dimensional classification matrix is created to divide suppliers and customers into four groups (namely, strategic-type, partner-type, general-type, and bottleneck-type) and supply chain operation strategies are devised for each group. Furthermore, based on such supply chain operations strategies of Company Z, a working capital risk management mechanism with an early warning system is developed, and a supply chain-based financing platform is designed to help the supply chain participants seek financing and share the risks with working capital.Com o advento da era da globalização económica, a cadeia de suprimentos tornou-se cada vez mais importante para a concorrência empresarial, e ao mesmo tempo, o fundo de maneio tornou-se num elemento chave para o sucesso da gestão da cadeia de suprimentos. Neste trabalho, a cadeia de suprimentos de uma empresa chinesa de fabricação de produtos típicos de proteção contra relâmpagos, a empresa Z, é o objeto de estudo. Tomando como ponto de partida os problemas de fundo de maneio existentes na cadeia de suprimentos da empresa Z, por meio de questionários combinados com o estabelecimento de um sistema de indexação e de ponderação, foram realizadas análises precisas sobre problemas-chaves existentes e da situação atual da gestão do fundo de maneio da cadeia de suprimentos a montante e a jusante da empresa Z. Estabeleceram-se matrizes bidimensionais de classificação para respectivamente subdividir os fornecedores e clientes em quatro categorias, a saber, categoria de fornecedores/clientes estratégicos, categoria de fornecedores/clientes parceiros, categoria de fornecedores/clientes comuns e categoria de fornecedores/clientes críticos (“engarrafamentos”) e propor estratégias diferentes na cadeia de suprimentos para diferentes categorias. Por fim, o nosso estudo indica que segundo a estratégia de operação da cadeia de suprimentos da empresa Z, deve ser estabelecido um mecanismo de controle e gestão de risco de fundo de maneio, um sistema de alerta de risco e, ainda, projetar uma plataforma de financiamento a fim de prover o financiamento emergente da cadeia de suprimentos da empresa Z e a partilha dos riscos de gestão do fundo de maneio

    Start-up manufacturing firms: operations for survival

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    Start-up firms play an important role in the economy. Statistics show that a large percent of start-up firms fail after few years of establishment. Raising capital, which is crucial to success, is one of the difficulties start-up firms face. This Ph.D thesis aims to draw suggestions for start-up firm survival from mathematical models and numerical investigations. Instead of the commonly held profi t maximizing objective, this thesis assumes that a start-up firm aims to maximize its survival probability during the planning horizon. A firm fails if it runs out of capital at a solvency check. Inventory management in manufacturing start-up firms is discussed further with mathematical theories and numerical illustrations, to gain insight of the policies for start-up firms. These models consider specific inventory problems with total lost sales, partial backorders and joint inventory-advertising decisions. The models consider general cost functions and stochastic demand, with both lead time zero and one cases. The research in this thesis provides quantitative analysis on start-up firm survival, which is new to the literature. From the results, a threshold exists on the initial capital requirement to start-up firms, above which the increase of capital has little effect on survival probability. Start-up firms are often risk-averse and cautious about spending. Entering the right niche market increases their chance of survival, where the demand is more predictable, and start-ups can obtain higher backorder rates and product price. Sensitivity tests show that selling price, purchasing price and overhead cost have the most impact on survival probability. Lead time has a negative effect on start-up firms, which can be offset by increasing the order frequent. Advertising, as an investment in goodwill, can increase start-up firms' survival. The advertising strategies vary according to both goodwill and inventory levels, and the policy is more flexible in start-up firms. Externally, a slightly less frequency solvency check gives start-up firms more room for fund raising and/or operation adjustment, and can increase the survival probability. The problems are modelled using Markov decision processes, and numerical illustrations are implemented in Java

    Framework for a sustainable ERP license model in an increasingly competitive software market

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    A research report submitted to the Faculty of Engineering and the Built Environment, University of the Witwatersrand, in fulfilment of the requirements for the degree of Master of Science in Engineering, under the supervision of Prof. I. Botef. Johannesburg, July 2015Enterprise Resource Planning (ERP) systems have notoriously complex license models. Whilst the ERP market has been dominated since the 1980‟s by SAP AG and Oracle Corp., this picture is changing with these software giants slowly losing market share to the more than 100 proprietary ERP systems available today. Many of these new entrants wield simpler, more transparent licensing models. This research aims to understand how the current ERP license models behave under varying market conditions with the goal of developing a “framework for a sustainable ERP license model in an increasingly competitive software market”. The research issues are addressed by modelling an actual economic firm with the aid of a software simulation. The aim of this simulation is to model how closely ERP license models link the benefit of the ERP to the cost of the license model. Simpler license models (employed by the new ERP entrants) demonstrated a comparable level of cost/benefit. The research concludes with a proposed framework for a sustainable ERP license model. Potential future research includes investigating the use of gain-share or profit-share models for future software license models
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