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

Impact of inventory inaccuracy on service-level quality: A simulation analysis

This article discusses the impact of inventory inaccuracy on service-level quality in (Q,R) continuous review, lost-sales inventory models. A simulation model is built to study the behaviour of this kind of model exposed to an inaccuracy in inventory records as well as demand variability. We have observed an unusual result which goes against certain empirical practices in the SMEs that consist in hiking the inventory level proportionally to the data inaccuracy rate. A nonmonotone function shows that at the outset, the service-level quality is lowered as the inaccuracy rate increases but when the inaccuracy rate becomes much higher this quality is conversely enhanced. This relation can equally be observed given that stocktaking commences as soon as the threshold of decline in the service-level rate has been reached and when demand consequently dwindles. Finally, another noteworthy result also shows the same phenomenon between the function involving a level of safety stock defined by the simulation and the function between the service-level quality and the inventory inaccuracy. These different observed results are discussed in terms of both contribution to the (Q,R) inventory management policies in SMEs and of the limitations to this study.Continuous review inventory system, inventory inaccuracy, continuous model, discrete-time simulation

Inventory drivers in a pharmaceutical supply chain

In recent years, inventory reduction has been a key objective of pharmaceutical companies, especially within cost optimization initiatives. Pharmaceutical supply chains are characterized by volatile and unpredictable demands –especially in emergent markets-, high service levels, and complex, perishable finished-good portfolios, which makes keeping reasonable amounts of stock a true challenge. However, a one-way strategy towards zero-inventory is in reality inapplicable, due to the strategic nature and importance of the products being commercialised. Therefore, pharmaceutical supply chains are in need of new inventory strategies in order to remain competitive. Finished-goods inventory management in the pharmaceutical industry is closely related to the manufacturing systems and supply chain configurations that companies adopt. The factors considered in inventory management policies, however, do not always cover the full supply chain spectrum in which companies operate. This paper works under the pre-assumption that, in fact, there is a complex relationship between the inventory configurations that companies adopt and the factors behind them. The intention of this paper is to understand the factors driving high finished-goods inventory levels in pharmaceutical supply chains and assist supply chain managers in determining which of them can be influenced in order to reduce inventories to an optimal degree. Reasons for reducing inventory levels are found in high inventory holding and scrap related costs; in addition to lost sales for not being able to serve the customers with the adequate shelf life requirements. The thesis conducts a single case study research in a multi-national pharmaceutical company, which is used to examine typical inventory configurations and the factors affecting these configurations. This paper presents a framework that can assist supply chain managers in determining the most important inventory drivers in pharmaceutical supply chains. The findings in this study suggest that while external and downstream supply chain factors are recognized as being critical to pursue inventory optimization initiatives, pharmaceutical companies are oriented towards optimizing production processes and meeting regulatory requirements while still complying with high service levels, being internal factors the ones prevailing when making inventory management decisions. Furthermore, this paper investigates, through predictive modelling techniques, how various intrinsic and extrinsic factors influence the inventory configurations of the case study company. The study shows that inventory configurations are relatively unstable over time, especially in configurations that present high safety stock levels; and that production features and product characteristics are important explanatory factors behind high inventory levels. Regulatory requirements also play an important role in explaining the high strategic inventory levels that pharmaceutical companies hold

An integrated shipment planning and storage capacity decision under uncertainty: a simulation study

Purpose – In transportation and distribution systems, the shipment decisions, fleet capacity, and storage capacity are interrelated in a complex way, especially when the authors take into account uncertainty of the demand rate and shipment lead time. While shipment planning is tactical or operational in nature, increasing storage capacity often requires top management’s authority. The purpose of this paper is to present a new method to integrate both operational and strategic decision parameters, namely shipment planning and storage capacity decision under uncertainty. The ultimate goal is to provide a near optimal solution that leads to a striking balance between the total logistics costs and product availability, critical in maritime logistics of bulk shipment of commodity items. Design/methodology/approach – The authors use simulation as research method. The authors develop a simulation model to investigate the effects of various factors on costs and service levels of a distribution system. The model mimics the transportation and distribution problems of bulk cement in a major cement company in Indonesia consisting of a silo at the port of origin, two silos at two ports of destination, and a number of ships that transport the bulk cement. The authors develop a number of “what-if” scenarios by varying the storage capacity at the port of origin as well as at the ports of destinations, number of ships operated, operating hours of ports, and dispatching rules for the ships. Each scenario is evaluated in terms of costs and service level. A full factorial experiment has been conducted and analysis of variance has been used to analyze the results. Findings – The results suggest that the number of ships deployed, silo capacity, working hours of ports, and the dispatching rules of ships significantly affect both total costs and service level. Interestingly, operating fewer ships enables the company to achieve almost the same service level and gaining substantial cost savings if constraints in other part of the system are alleviated, i.e., storage capacities and working hours of ports are extended. Practical implications – Cost is a competitive factor for bulk items like cement, and thus the proposed scenarios could be implemented by the company to substantially reduce the transportation and distribution costs. Alleviating storage capacity constraint is obviously an idea that needs to be considered when optimizing shipment planning alone could not give significant improvements. Originality/value – Existing research has so far focussed on the optimization of shipment planning/scheduling, and considers shipment planning/scheduling as the objective function while treating the storage capacity as constraints. The simulation model enables “what-if” analyses to be performed and has overcome the difficulties and impracticalities of analytical methods especially when the system incorporates stochastic variables exhibited in the case example. The use of efficient frontier analysis for analyzing the simulation results is a novel idea which has been proven to be effective in screening non-dominated solutions. This has provided the authors with near optimal solutions to trade-off logistics costs and service levels (availability), with minimal experimentation times

Risk Limiting Dispatch with Ramping Constraints

Reliable operation in power systems is becoming more difficult as the penetration of random renewable resources increases. In particular, operators face the risk of not scheduling enough traditional generators in the times when renewable energies becomes lower than expected. In this paper we study the optimal trade-off between system and risk, and the cost of scheduling reserve generators. We explicitly model the ramping constraints on the generators. We model the problem as a multi-period stochastic control problem, and we show the structure of the optimal dispatch. We then show how to efficiently compute the dispatch using two methods: i) solving a surrogate chance constrained program, ii) a MPC-type look ahead controller. Using real world data, we show the chance constrained dispatch outperforms the MPC controller and is also robust to changes in the probability distribution of the renewables.Comment: Shorter version submitted to smartgrid comm 201

Analysis of air quality management with emphasis on transportation sources

The current environment and practices of air quality management were examined for three regions: Denver, Phoenix, and the South Coast Air Basin of California. These regions were chosen because the majority of their air pollution emissions are related to mobile sources. The impact of auto exhaust on the air quality management process is characterized and assessed. An examination of the uncertainties in air pollutant measurements, emission inventories, meteorological parameters, atmospheric chemistry, and air quality simulation models is performed. The implications of these uncertainties to current air quality management practices is discussed. A set of corrective actions are recommended to reduce these uncertainties

Impact of New Madrid Seismic Zone Earthquakes on the Central USA, Vol. 1 and 2

The information presented in this report has been developed to support the Catastrophic Earthquake Planning Scenario workshops held by the Federal Emergency Management Agency. Four FEMA Regions (Regions IV, V, VI and VII) were involved in the New Madrid Seismic Zone (NMSZ) scenario workshops. The four FEMA Regions include eight states, namely Illinois, Indiana, Kentucky, Tennessee, Alabama, Mississippi, Arkansas and Missouri. The earthquake impact assessment presented hereafter employs an analysis methodology comprising three major components: hazard, inventory and fragility (or vulnerability). The hazard characterizes not only the shaking of the ground but also the consequential transient and permanent deformation of the ground due to strong ground shaking as well as fire and flooding. The inventory comprises all assets in a specific region, including the built environment and population data. Fragility or vulnerability functions relate the severity of shaking to the likelihood of reaching or exceeding damage states (light, moderate, extensive and near-collapse, for example). Social impact models are also included and employ physical infrastructure damage results to estimate the effects on exposed communities. Whereas the modeling software packages used (HAZUS MR3; FEMA, 2008; and MAEviz, Mid-America Earthquake Center, 2008) provide default values for all of the above, most of these default values were replaced by components of traceable provenance and higher reliability than the default data, as described below. The hazard employed in this investigation includes ground shaking for a single scenario event representing the rupture of all three New Madrid fault segments. The NMSZ consists of three fault segments: the northeast segment, the reelfoot thrust or central segment, and the southwest segment. Each segment is assumed to generate a deterministic magnitude 7.7 (Mw7.7) earthquake caused by a rupture over the entire length of the segment. US Geological Survey (USGS) approved the employed magnitude and hazard approach. The combined rupture of all three segments simultaneously is designed to approximate the sequential rupture of all three segments over time. The magnitude of Mw7.7 is retained for the combined rupture. Full liquefaction susceptibility maps for the entire region have been developed and are used in this study. Inventory is enhanced through the use of the Homeland Security Infrastructure Program (HSIP) 2007 and 2008 Gold Datasets (NGA Office of America, 2007). These datasets contain various types of critical infrastructure that are key inventory components for earthquake impact assessment. Transportation and utility facility inventories are improved while regional natural gas and oil pipelines are added to the inventory, alongside high potential loss facility inventories. The National Bridge Inventory (NBI, 2008) and other state and independent data sources are utilized to improve the inventory. New fragility functions derived by the MAE Center are employed in this study for both buildings and bridges providing more regionally-applicable estimations of damage for these infrastructure components. Default fragility values are used to determine damage likelihoods for all other infrastructure components. The study reports new analysis using MAE Center-developed transportation network flow models that estimate changes in traffic flow and travel time due to earthquake damage. Utility network modeling was also undertaken to provide damage estimates for facilities and pipelines. An approximate flood risk model was assembled to identify areas that are likely to be flooded as a result of dam or levee failure. Social vulnerability identifies portions of the eight-state study region that are especially vulnerable due to various factors such as age, income, disability, and language proficiency. Social impact models include estimates of displaced and shelter-seeking populations as well as commodities and medical requirements. Lastly, search and rescue requirements quantify the number of teams and personnel required to clear debris and search for trapped victims. The results indicate that Tennessee, Arkansas, and Missouri are most severely impacted. Illinois and Kentucky are also impacted, though not as severely as the previous three states. Nearly 715,000 buildings are damaged in the eight-state study region. About 42,000 search and rescue personnel working in 1,500 teams are required to respond to the earthquakes. Damage to critical infrastructure (essential facilities, transportation and utility lifelines) is substantial in the 140 impacted counties near the rupture zone, including 3,500 damaged bridges and nearly 425,000 breaks and leaks to both local and interstate pipelines. Approximately 2.6 million households are without power after the earthquake. Nearly 86,000 injuries and fatalities result from damage to infrastructure. Nearly 130 hospitals are damaged and most are located in the impacted counties near the rupture zone. There is extensive damage and substantial travel delays in both Memphis, Tennessee, and St. Louis, Missouri, thus hampering search and rescue as well as evacuation. Moreover roughly 15 major bridges are unusable. Three days after the earthquake, 7.2 million people are still displaced and 2 million people seek temporary shelter. Direct economic losses for the eight states total nearly $300 billion, while indirect losses may be at least twice this amount. The contents of this report provide the various assumptions used to arrive at the impact estimates, detailed background on the above quantitative consequences, and a breakdown of the figures per sector at the FEMA region and state levels. The information is presented in a manner suitable for personnel and agencies responsible for establishing response plans based on likely impacts of plausible earthquakes in the central USA.Armu W0132T-06-02unpublishednot peer reviewe