Study on the Criticism of the Safety Stock in Supply Chain Environment

Supply chain optimization is playing a great role for organizations to face high dynamic environment. One of the most important parts in optimization is inventory optimization which can obtained by optimize the safety stock based on the balance between holding cost of safety stock quantities and shortage cost of unfulfilled of customer demand. Fuzzy logic system considered adoptable tool can deals with uncertainty and dynamic environment and it can assemble and control demand and supply variability to identify optimal safety stock level by using same resources. A major limitation in safety stock researches is the rare of the researches that deals dynamically with inventory and employing daily basis calculation; hence the aim of this research is to provide comprehensive study about safety stock and its approaches as well as the trends of future work in this field

Cascading Effects of Fuel Network Interdiction

This thesis develops the Fuel Interdiction and Resulting Cascading Effects (FI&RCE) model. The study details the development and experimental testing of a framework for assessing the interdiction of a refined petroleum production and distribution network. FI&RCE uses a maximum flow mathematical programming formulation that models the transit of fuels from points of importation and refinement through a polyduct distribution network for delivery across a range of end user locations. The automated model accommodates networks of varying size and complexity. FI&RCE allows for parameters and factor settings that enable robust experimentation through implementation in MATLAB 2014 and the commercial solver CPLEX (Version 12.5). Experimental design allows the investigation of interdiction or disruption on supply and network infrastructure locations in order to support the strategic analytical needs of the user. Given a target set, FI&RCE provides measured responses for the resulting fuel availability and a valuation of economic loss. The value of economic loss feeds a Leontief based input-output model that assesses the cascading effects in the studied economy by implementing a mathematical program that optimizes the remaining industrial outputs. FI&RCE demonstrates a framework to investigate the military and cascading effects of a fuel interdiction campaign plan using a realistic case study

Assessment of the Effect of Out-of-Stock on Customers Purchasing Behavior

The objective of this exploratory study was to examine stock-outs as an event and document their effects on changes in customer attitudes. A study containing both open-ended and close-ended elements was validated through a pilot study and used to collect data from 100 randomly selected participants spending at Shewa Shopping Center in Addis Ababa. The finding indicated that repeated stock-out experiences reduced customers’ loyalty to brand and retailer and caused customers to leave both retailers and brand. Participants indicated that stock-out effects can be shielded through improved inventory management and better customer service. Explicit recommendations involved apology, price discounts and free delivery. The finding of this study will enable retailers to gain deeper considerate of how stock-out affects customers shopping experiences and loyalty, and offer alleviation measures to improve both. In addition, the finding will provide a positive change to both customers and retailers, where shoppers will enjoy pleasant shopping experiences and retailers can maintain their competitive advantage via loyalty of their customer. Keywords:  Showa Shopping Center, Stock-out, Shoppers Behavior, Buyers Loyalty DOI: 10.7176/EJBM/11-1-0

A collaborative framework in outbound logistics for the us automakers

The competitive landscape of the U.S. automotive market has transformed from the traditional Big Three players to too many viable players. In 2008-2009, the harsh market conditions, excess production capacity, capital asset redundancies, and many inefficient strategies submerged as the roadblocks for the US automakers to stay competitive and profitable in the North American market. In this new competitive era, cross-company collaboration in product development, standardizing and communizing supply base, sharing flexible manufacturing platforms, using common inbound and out bound logistics service providers and warehousing etc. can play vital roles for the US automakers to reduce overall cost and return to profitability. Through the horizontal collaboration in the outbound logistics operations, these companies can create close-knit business partnership and act faster than the foreign rivals in delivering finished vehicles at the optimum cost. The optimization of outbound logistics operations through consolidation and collaboration among OEMs has tremendous potential to contribute to the profitability by lowering the cost of transportation, in-house inventory, transportation time, and facility costs. The collaboration in the intra- and inter-OEM outbound logistics operations is a critical area that the US automakers need to pay attention and prioritize in their cost reduction initiatives. This research presents an integrated collaboration framework for the outbound logistics operations of the US automakers. In our framework, we propose three potential levels for the US automakers to form outbound logistics collaboration: operational, tactical, and strategic. Our research proposition is to improve the performance of outbound logistics systems of automotive OEMs by means of horizontal collaboration between plants and competing OEMs. The proposed research thus relates to the literature on logistics system design and management and horizontal collaboration in supply chain management. The collaboration framework is demonstrated through a real world case study in US automotive industry. The contribution of this research is the introduction of a framework for intra- and inter-OEM collaboration and the development of novel logistics network design and flow models integrated with inventory models, lost sales, and expedited shipment. Besides the contribution to the academic literature, the proposed collaborative distribution system is a new concept in the automotive industry. Hence, this novel research work will also benefit to the practitioners. Keywords: Operational Collaboration, Tactical Collaboration, Strategic Collaboration, Frequency based Inventory, Customer Patience and Lost Sales, Expedited Shipments

The impact of governance on efficiency: case studies on airports and seaports

Airports and seaports have experienced significant governance reforms over the last few decades. As major airports are argued to have market power, they are subject to some form of economic regulation. Airports used to be subject to rate-of-return regulation. More recently, there has been a reform in airport economic regulation and they are increasingly being subject to incentive based price-cap regulation and light-handed regulation or monitoring. In the policy debate, it is of interest to analyse whether price-cap regulation and light-handed regulation of airports are superior to rate-of-return regulation. In the case of seaports, there has been a reform in their governance model and a large number of seaports now follow the landlord seaport model. In a landlord seaport, the port authority is responsible for monitoring and coordination while specialized private terminal operators are responsible for cargo handling and seaport operations. Policy debates have focused on whether the landlord seaport model leads to superior performance in comparison to the service seaport model where most responsibilities are handled by the port authority or the public sector. Airports and seaports are increasingly being regulated by independent regulators because they are not susceptible to regulatory capture. Policy debates have also focused on whether independent regulators lead to a superior performance in comparison to dependent regulators. The first part of this thesis focuses on airport regulation and its impact on efficiency. We conduct a literature review of the theoretical and empirical literature on airport regulation and efficiency. We find that dual-till price-cap regulation and light-handed regulation are preferable to rate-of-return regulation from an efficiency perspective. We also find that while light-handed regulation leads to efficient airports, it does not necessarily constrain airport charges and hence does not lead to the cheapest airports. We find that independent regulators enhance airport performance. With respect to slot allocation, we find that slot allocation is superior to queuing in terms of capacity, delay and congestion management. However, we find that slot allocation based on economic principles is superior to administrative slot allocation. In this part of the thesis, we also identify gaps in the empirical literature which require further analysis. The next part of the thesis focuses on the impact of governance on the technical efficiency of major Indian seaports. This chapter uses a non-oriented slacks based measure of technical efficiency in the first stage and a fixed effects regression in the second stage in order to analyse the impact of governance on the technical efficiency of the major Indian seaports. From the first stage, we find that most of the seaports have a scope for improvement in technical efficiency. From the second stage analysis, we find that specialization has the highest positive impact on technical efficiency. We hence propose that the major Indian seaports have to specialize because they can benefit from economies of scale. With respect to ownership, we find that external stakeholder participation has a significant positive impact on technical efficiency. This gives evidence that the landlord seaport model is conducive to enhanced technical efficiency. With respect to competition, we find that competition from the non-major Indian seaports from within the state and along the coast has a significant negative impact on the technical efficiency of the major Indian seaports. We argue that this is because of the tiered governance framework, which results in excess capacity at the major Indian seaports. We propose that the seaports should have a common governance, institutional and regulatory framework, which can enhance their performance. With respect to regulation, we find that rate-of-return regulation by an independent regulator is superior to internal regulation by the port authority in terms of technical efficiency. We argue that this is because the independent regulator is not susceptible to regulatory capture unlike the port authorities. The last part of the thesis focuses on the impact of governance on the technical efficiency of container ports from the Far East and Asian region. This chapter uses stochastic frontier analysis in order to estimate a production frontier. It makes use of a single step procedure which can be used to estimate the production frontier as well as to estimate the impact of the governance-related contextual variables on the technical efficiency of these container ports. We estimate the individual as well as the combined effects of the governance-related contextual variables on the technical efficiency of these container ports. From the individual effects model, we find that majority private container ports are significantly more technically efficient in comparison to minority private container ports. This gives evidence that the landlord seaport model is conducive to enhanced technical efficiency. With respect to competition, from the individual effects model, we find that both hinterland and transshipment competition enhance the technical efficiency of these container ports. With respect to regulation, from the individual effects model, we find that regulation by an independent regulator is the most conducive to enhanced technical efficiency. In the combined effects model, a majority private container port which faces high hinterland competition and has no economic regulation is taken as the base case. Most of the other combinations of the contextual variables result in a significantly lower technical efficiency in comparison to the base case. However, a majority private container port which faces low hinterland competition and either has no economic regulation or is regulated by an independent regulator is significantly more technically efficient in comparison to the base case. Our results further show that when a port is majority private and faces low hinterland competition, regulation by an independent regulator results in a significantly higher technical efficiency in comparison to having no economic regulation. We argue that this is caused because there is excessive entry and hence majority private container ports which face low hinterland competition and are regulated by an independent regulator are the most technically efficient. We propose that along with the setting up of independent regulators for container ports, policymakers should also ensure that entry is at an optimal level, which can result in competition that is effective and technical efficiency enhancing

Improving Logistics Processes in a Global Spares Supply Organization

This thesis studies logistics processes related to balancing of the inventories between supply channels. Balancing operations are based on lateral transshipments, which are a recent field of studies and have been on the focus of the optimization studies during the past few years. The findings of the study model current processes and material flows, reveals issues related to processes, studies cost figures and provides alternative solutions for improvement. The main objective of the study is to provide a construction that makes it possible to improve decision-making related to inventory balancing between the distribution centers of the organization. This study answers three main questions: How does the existing inventory network look like? What kind of issues and development areas are there? How is it possible to improve current inventory pooling operations? This study is a single case study carried out in a global spares supply organization willing to improve their logistics processes. To achieve the objects of the study, several methods were needed: literature survey on logistics models, sourcing methods and logistics cost models, qualitative information through interviews in the case company, study of the existing process descriptions and contract terms in addition to several quantitative analyses on the performance of the operations. Due to multiple methods, reliability and validity is increased as is the extent of the study. Findings of this study demonstrate that the expansion of the company on Asian markets is in its infancy and that the processes lack standardization and appropriate tools. Asian Distribution Center is highly dependent on European suppliers. Despite the strategic aspect of Asian supplier markets, supplier base does not yet provide a comprehensive alternative for balancing transshipments from Europe. This underlines the importance of processes on inventory balancing as they provide significant cost reductions against local sourcing in Asia at the moment. It is recommended to continue balancing using European supply chains, but to set up ocean deliveries for major flows and to focus sourcing efforts on establishing local suppliers for materials that have the highest importance by their total value. Future studies should provide more detailed information on quality and sourcing related costs to improve cost analysis and comparisons in addition to benchmarking values and ratios. /Kir1

Cross-Docking: A Proven LTL Technique to Help Suppliers Minimize Products\u27 Unit Costs Delivered to the Final Customers

This study aims at proposing a decision-support tool to reduce the total supply chain costs (TSCC) consisting of two separate and independent objective functions including total transportation costs (TTC) and total cross-docking operating cost (TCDC). The full-truckload (FT) transportation mode is assumed to handle supplier→customer product transportation; otherwise, a cross-docking terminal as an intermediate transshipment node is hired to handle the less-than-truckload (LTL) product transportation between the suppliers and customers. TTC model helps minimize the total transportation costs by maximization of the number of FT transportation and reduction of the total number of LTL. TCDC model tries to minimize total operating costs within a cross-docking terminal. Both sub-objective functions are formulated as binary mathematical programming models. The first objective function is a binary-linear programming model, and the second one is a binary-quadratic assignment problem (QAP) model. QAP is an NP-hard problem, and therefore, besides a complement enumeration method using ILOG CPLEX software, the Tabu search (TS) algorithm with four diversification methods is employed to solve larger size problems. The efficiency of the model is examined from two perspectives by comparing the output of two scenarios including; i.e., 1) when cross-docking is included in the supply chain and 2) when it is excluded. The first perspective is to compare the two scenarios’ outcomes from the total supply chain costs standpoint, and the second perspective is the comparison of the scenarios’ outcomes from the total supply chain costs standpoint. By addressing a numerical example, the results confirm that the present of cross-docking within a supply chain can significantly reduce total supply chain costs and total transportation costs

Modeling and analyzing a health care supply chain system

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University.A Thesis presented on Improving and Redefining the Supply Chain in Healthcare, defining existing problems with current Supply Chain applications, and reviewing current applications and trends in the Supply Chain culture within the Manufacturing Industries and Healthcare Industries. Research of successful applications of new, and improvements to existing supply chain methodologies are presented. The concept of a future Supply Chain Management System, extending the boundaries of conventional Healthcare Supply Chain to include both conventional customer (Healthcare Materiel and Capital Assets Requestors and Distributors) and the nonconventional (the Healthcare Beneficiary), is presented in detail. Final discussions and conclusions of this concept are offered as a review of this concept for the reader of this manuscript

Inventory Management Modeling With Markov Decision Process (Mdp) For Equitable Distribution Of Supplies Under Uncertainty

Food insecurity is defined as the situation where people are not able to access enough food at all times for an active, healthy life. The 2012 food security report stated that 49 million Americans including children lived in food insecure households. Many individuals suffering from food insecurity obtain assistance from governmental programs and nonprofit agencies. Food banks are one of many non-profit organizations assisting in the fight against hunger. They serve communities by distributing food to those in need through charitable agencies. Many of the food distributed by the food bank comes from donations. These donations are received from various sources in uncertain quantities at random points in time. Working with this type of uncertainty in supplies can be very challenging. This thesis aims at developing a decision making model that will assist food banks to distribute supplies equitably as well as measure their performance using the pounds per person in poverty indicator. This model will also assist them in managing their inventory levels in order to meet the demand of aid recipients with the random supplies (donations) to the food bank