Study of Client Reject Policies under Lead-Time and Price Dependent Demand

Delivery lead-time has become a factor of competitiveness for companies and an important criterion of purchase for the customers today. Thus, in order to increase their profit, companies must not focus only on price but also need to quote the right delivery lead time to their customers. Some authors to find a way in quoting the right delivery lead-time while considering an M/M/1 system. In M/M/1, all customers are accepted. This can lead to longer lead times in the queue. Firms can react by quoting longer lead times in order to cope with this situation. However, this leads to lower demand and revenue. Starting from this observation, we investigate in this paper whether a customer rejection policy can be more beneficial for the firm than an all-customers’ acceptance policy. Indeed, our idea is based on the fact that rejecting some customers might help to quote shorter lead time for the accepted customers, which might lead to higher demand and profit. We model this rejection policy based on an M/M/1/K system. We analytically determine the optimal firm’s policy (optimal price and quoted lead time) in case of M/M/1/1 system. Then, we compare the optimal firm’s profit under M/M/1/1 with the optimal profit obtained by M/M/1. Two situations are considered: a system without holding and penalty costs and a system where these costs are included

Framework Development for The Assessment of The Supply Chain Resilience Using The House of Risk

The COVID-19 pandemic has created uncertainty and disruptions in Supply Chain (SC), which has caused many researchers to re-study Supply Chain Risk Management (SCRM) to deal with risks due to the pandemic. Moreover, the direction of post-pandemic SCRM research is more toward Supply Chain Resilience (SCRes) which is the ability of a supply chain to prepare for disruptions and return to normalcy. Many researchers have started researching SCRes to carry out SC recovery measures. However, research on the quantification of SCRes is still rare and is an opportunity. One of the risk quantification methods in the SCRM field is the House of Risk (HoR). This study develops a SCRes assessment framework with the help of the HoR. HoR has two stages, namely: HoR1 for identifying the risks and HoR2 for mitigating the risks. In this study, one step was added, namely the level assessment stage of resilience. The resilience profile is calculated based on the risk map and mitigation plan. This study succeeded in providing a framework for assessing the level of resilience using the help of HoR. Meanwhile, only an illustrative case study is used. Our future research is on how to apply the proposed resilience assessment framework to a real case. Keywords: supply chain, risk management, supply chain resilience, house of risk, framewor

PEMBUATAN WORKBENCH ERGONOMIS UNTUK MENDUKUNG AKTIVITAS PEMILAHAN, PENGEPRESAN, DAN PENGARUNGAN SAMPAH AIR MINUM DALAM KEMASAN DI KELURAHAN WONKUSUMO SURABAYA

Kegiatan pengabdian masyarakat ini adalah memberikan workbench untuk kegiatan Bank Sampah di Kelurahan Bulaksari. Para Ibu rumah tangga di beberapa Rukun Tetangga (RT) melakukan pengelolaan sampah Air Minum Dalam Kemasan (AMDK) dengan melakukan sortir, pembersihan sampah dan pengarungan. Namun, didapati kondisi selama proses sortir sampah, tidak ergonomis, dimana para ibu rumah tangga ini melakukan kegiatan tersebut tidak dengan menggunakan alat bantu yang layak dan dengan posisi duduk membungkuk. Implikasi kegiatan pengabdian masyarakat terbagi ke beberapa kegiatan, pertama adalah mengadakan sosialisasi terkait kegiatan pengelolaan sampah dan itikad untuk membantu kegiatan tersebut. Kemudian dilanjutkan dengan pembuatan ergonomic workbench, dimana alat bantu ini dapat memberikan kenyamanan dan keamanan saat bekerja karena didesain dengan mengakomodir prinsip perancangan metode kerja dan produk, Terakhir adalah dengan melakukan trial produk versi pertama untuk mendapatkan masukan dalam pengembangan produk versi kedua. Kata kunci: sampah plastik, air minum dalam kemasan, alat kerja, ergonomis, bank sampah ABSTRACT This community service is to provide a workbench for garbage bank activites in Bulaksari Village. Housewives in several Neighborhood Communities (RT) manage Bottle Drinking Water (AMDK) waste by sorting, cleaning and rafting in a sack. However, it was found that the conditions during the waste sorting process were not ergonomic, where these housewives did not use proper tools and bent sitting position. The implication of community service activities are divided into several activities, first is holding socialization related to waste management activities and the intention to help these activities. Then proceed with the manufacture of an ergonomic workbench, where this tool can provide comfort and safety while working because it is designed to accommodate the principles of ergonomics designing work products. Keywords: plastic waste, bottled mineral drinking water, workbench, ergonomics, waste ban

PEMODELAN PERMINTAAN YANG MEMPERTIMBANGKAN HARGA, LOKASI DAN REBATE

In accordance with Hottelling's Law, strategic location is a significant factor to ensure the success of a business, thus two businesses which sell the same product tend to choose a closed location. The real practice of this concept is seen in the competition of two big retailers which often open their shop nearby. However, in such competition, the location factor is merely not sufficient. It is necessary to consider other factors such as price and rebate or discount types given to their customers. This paper, particularly, aims to see the customers' preferences towards given attributes i.e. price, location, and discount types. The data is collected bymeans of a survey with non-probability sampling that is judgmental sampling. The respondents are people reside in Surabaya, Sidoarjo, and nearby whose age between 15-45 years and having various profession. The data is then processed with conjoint analysis by which is used as a basisto reconstruct a demand model considering the customer's preferences. The result shows that the attribute which is most considerable by respondents is the discount types, herein is a bundling product that comprises various products. This attribute has a preference level at 54.53%. The second prioritized attribute is the retailer location with a preference level at 24.28%. This means that a closer retailer is the most preferable by the respondent. Meanwhile, price is the last attribute considered by the respondent in choosing the retailer with a preference level at 21.28%. Thus, a respondent tends to pick a cheaper product after considering its discount type and the distance of retailer

Water Quality Monitoring with Regression Based PPM Sensor for Controlling Hydroponic Dissolved Nutrient

Hydroponic cultivation requires rigorous monitoring and control of several parameters, such as turbidity, electric conductivity, acidity (pH), dissolved oxygen and nutrient, which usually be measured once a day manually. Therefore, automation in hydroponic cultivation requires those water quality information as the controlled variable. The dissolved nutrient is especially important because it significantly affects the hydroponic plant growth. Acquiring the dissolved nutrient can be done by using a PPM (parts per million) sensor, but most of the time the sensor needs further processing to obtain the desired measurement. This study presents a reading correction of a PPM sensor based on a regression method so the desired measurement can be done. Sample water with different PPM, such 309 PPM, 290 PPM, 762 PPM, 1910 PPM and 2420 PPM are measured first using a standard PPM meter. Then, the sample PPM is measured by using the PPM sensor. The study also investigates the best regression method to map the PPM sensor measurement to the standard PPM meter measurement by comparing several line equations, such as linear, exponential, polynomial and logarithmic. The function coefficient and bias is chosen by using least square methods. After comparing, the result shows that the polynomial function provides the best reading correction with average error of 76 PPM. The error is especially few when measuring the higher PPM (more than 500 PPM), which is suitable with hydroponic cultivation. Therefore, the PPM sensor with the polynomial function shown in this study can be used to measure the dissolve nutrient accurately in the automation of hydroponic activity compare to other line equations. This study is limited to small sample sizes to prove the concept. The generalization can also be considered in the future study

Water Quality Monitoring with Regression Based PPM Sensor for Controlling Hydroponic Dissolved Nutrient

Hydroponic cultivation requires rigorous monitoring and control of several parameters, such as turbidity, electric conductivity, acidity (pH), dissolved oxygen and nutrient, which usually be measured once a day manually. Therefore, automation in hydroponic cultivation requires those water quality information as the controlled variable. The dissolved nutrient is especially important because it significantly affects the hydroponic plant growth. Acquiring the dissolved nutrient can be done by using a PPM (parts per million) sensor, but most of the time the sensor needs further processing to obtain the desired measurement. This study presents a reading correction of a PPM sensor based on a regression method so the desired measurement can be done. Sample water with different PPM, such 309 PPM, 290 PPM, 762 PPM, 1910 PPM and 2420 PPM are measured first using a standard PPM meter. Then, the sample PPM is measured by using the PPM sensor. The study also investigates the best regression method to map the PPM sensor measurement to the standard PPM meter measurement by comparing several line equations, such as linear, exponential, polynomial and logarithmic. The function coefficient and bias is chosen by using least square methods. After comparing, the result shows that the polynomial function provides the best reading correction with average error of 76 PPM. The error is especially few when measuring the higher PPM (more than 500 PPM), which is suitable with hydroponic cultivation. Therefore, the PPM sensor with the polynomial function shown in this study can be used to measure the dissolve nutrient accurately in the automation of hydroponic activity compare to other line equations. This study is limited to small sample sizes to prove the concept. The generalization can also be considered in the future study

Pricing decision and lead time quotation in supply chains with an endogenous demand sensitive to lead time and price

Parallèlement au prix, le délai de livraison est un facteur clé de compétitivité pour les entreprises. De plus les entreprises sont plus que jamais obligées de respecter ce délai promis. La combinaison du choix du prix et du délai promis implique de nouveaux compromis et offre de nombreuses perspectives. Un délai plus court peut entraîner une augmentation de la demande, mais augmente également le risque de livraison tardive et donc décourager les clients. A contrario un délai plus long ou un prix plus élevé entraîne généralement une baisse de la demande. Or malgré le rôle stratégique conjoint du prix et des délais et leurs impacts sur la demande, dans la littérature en gestion des opérations on suppose très généralement une demande exogène (fixée a priori) même si la conception de la chaîne impacte fortement les délais (localisation des sites, positionnement des stocks,..) et donc la demande. Nous nous sommes donc intéressés à ces choix de fixation des délais promis et du prix dans un contexte de demande endogène.La littérature traitant du choix du délai et du prix sous demande endogène a principalement considéré un contexte de fabrication à la commande (Make to Order). Un papier fondateur de Palaka et al en 1998 a présenté cette problématique avec une modélisation de l’entreprise par une file d’attente M/M/1 et nos travaux se placent dans la suite de ce travail. Notre revue de la littérature a permis d'identifier de nouvelles perspectives et nous proposons trois extensions dans cette thèse.Dans notre première contribution, en utilisant le cadre de Palaka et al, nous considérons que le coût de production est une fonction décroissante du délai. Dans tous les articles publiés dans ce contexte, le coût de production unitaire a été supposé constant. Pourtant en pratique, le coût de production unitaire dépend du délai promis, l'entreprise pouvant mieux gérer le processus de production et réduire les coûts de production en proposant des délais plus longs aux clients.Dans la deuxième contribution, nous considérons toujours le cadre de Palaka et al, mais modélisons l'entreprise comme une file d'attente M/M/1/K, pour laquelle la demande est donc rejetée s'il y a déjà K clients dans le système. Dans la littérature issue du travail de Palaka seule la file d'attente M/M/1 a été utilisée, ce qui signifie que tous les clients sont acceptés, ce qui peut entraîner de longues durées de séjour dans le système. Notre idée est basée sur le fait que rejeter certains clients, même si cela peut apparaitre dans un premier temps comme une perte de demande, pourrait aider à proposer un délai plus court pour les clients acceptés, et finalement conduire à une demande et donc un profit plus élevé.Dans la troisième contribution nous étudions un nouveau cadre pour le problème du délai et du prix en fonction de la demande endogène, en modélisant une chaîne logistique composée de deux étapes de production, modélisée par un réseau de files d’attente tandem (M/M/1-M/M/1). Dans la littérature avec ce cadre multi-entreprise, tous les articles ont considéré qu'un seul acteur avait des opérations de production, l'autre acteur ayant un délai nul. Nous avons étudié les scénarios centralisés et décentralisés.Pour chacun des nouveaux problèmes nous avons proposé des formulations maximisant le profit composé du revenu diminué des coûts de production, de stockage et pénalité de retard, et fourni des résolutions optimales, analytiques ou numériques. Ces résolutions nous ont amenés à démontrer de nouveaux résultats (retard moyen dans une M/M/1/K ; condition pour que des contraintes de service locales permettent d’assurer une contrainte de service globale dans un système en tandem). Nous avons mené des expériences numériques pour voir l’influence des différents paramètres.Along with the price, the delivery lead time has become a key factor of competitiveness for companies and an important purchase criterion for many customers. Nowadays, firms are more than ever obliged to meet their quoted lead time, which is the delivery lead time announced to the customers. The combination of pricing and lead time quotation implies new trade-offs and offers opportunities for many insights. For instance, on the one hand, a shorter quoted lead time can lead to an increase in the demand but also increases the risk of late delivery and thus may affect the firm’s reputation and deter future customers. On the other hand, a longer quoted lead time or a higher price generally yields a lower demand. Despite the strategic role of joint pricing and lead time quotation decisions and their impacts on demand, in the operations management literature an exogenous demand (a priory a known demand) is generally used in supply chain models, even if the design of the supply chain has a strong impact on lead times (i.e., sites location, inventory position, etc.) and thus affects the demand. Therefore, we are interested in the lead time quotation and pricing decisions in a context of endogenous demand (i.e., demand sensitive to price and quoted lead time).The literature dealing with pricing and lead time quotation under an endogenous demand mainly considered a make to order (MTO) context. A pioneer paper, Palaka et al. (1998), investigated this issue by modeling the company as an M/M/1 queue, and our work follows their footsteps. Our review of the literature allowed to identify new perspectives for this problem, which led to three main contributions in this thesis.In our first contribution, using Palaka et al.’s framework, we consider the unit production cost to be a decreasing function in quoted lead time. In most published papers, the unit production cost was assumed to be constant. In practice, the unit production cost generally depends on the quoted lead time. Indeed, the firm can manage better the production process and reduce the production cost by quoting longer lead time to the customers.In the second contribution, we still consider Palaka et al.’s framework but model the firm as an M/M/1/K queue, for which demand is rejected if there are already K customers in the system. In the literature on single firm setting following Palaka et al.’s research, only the M/M/1 queue was used, i.e., where all customers are accepted, which might lead to long sojourn times in the system. Our idea is based on the fact that rejecting some customers, might help to quote shorter lead time for the accepted ones, which might finally lead to a higher profitability, even if in the first glance we lose some demand.In the third contribution, we study a new framework for the lead time quotation and pricing problem under endogenous demand as we model the supply chain by two production stages in a tandem queue (M/M/1-M/M/1). In the literature with multi-firm setting, all papers considered that only one actor has production operations and the other actor has zero lead time. We investigated both the centralized and decentralized decision settings.For each problem studied, we formulated a profit-maximization model, where the profit consists of a revenue minus the production, storage and lateness penalty costs, and provides the optimum result (analytically or numerically). These resolutions led us to demonstrate new theoretical results (such as the expected lateness in an M/M/1/K, and the sufficient condition required to satisfy the global service constraint in a tandem queue by only satisfying the local service constraints). We also conducted numerical experiments and derived managerial insights

Choix du prix et du délai de livraison dans une chaîne logistique avec une demande endogène sensible au délai de livraison et au prix

Along with the price, the delivery lead time has become a key factor of competitiveness for companies and an important purchase criterion for many customers. Nowadays, firms are more than ever obliged to meet their quoted lead time, which is the delivery lead time announced to the customers. The combination of pricing and lead time quotation implies new trade-offs and offers opportunities for many insights. For instance, on the one hand, a shorter quoted lead time can lead to an increase in the demand but also increases the risk of late delivery and thus may affect the firm’s reputation and deter future customers. On the other hand, a longer quoted lead time or a higher price generally yields a lower demand. Despite the strategic role of joint pricing and lead time quotation decisions and their impacts on demand, in the operations management literature an exogenous demand (a priory a known demand) is generally used in supply chain models, even if the design of the supply chain has a strong impact on lead times (i.e., sites location, inventory position, etc.) and thus affects the demand. Therefore, we are interested in the lead time quotation and pricing decisions in a context of endogenous demand (i.e., demand sensitive to price and quoted lead time).The literature dealing with pricing and lead time quotation under an endogenous demand mainly considered a make to order (MTO) context. A pioneer paper, Palaka et al. (1998), investigated this issue by modeling the company as an M/M/1 queue, and our work follows their footsteps. Our review of the literature allowed to identify new perspectives for this problem, which led to three main contributions in this thesis.In our first contribution, using Palaka et al.’s framework, we consider the unit production cost to be a decreasing function in quoted lead time. In most published papers, the unit production cost was assumed to be constant. In practice, the unit production cost generally depends on the quoted lead time. Indeed, the firm can manage better the production process and reduce the production cost by quoting longer lead time to the customers.In the second contribution, we still consider Palaka et al.’s framework but model the firm as an M/M/1/K queue, for which demand is rejected if there are already K customers in the system. In the literature on single firm setting following Palaka et al.’s research, only the M/M/1 queue was used, i.e., where all customers are accepted, which might lead to long sojourn times in the system. Our idea is based on the fact that rejecting some customers, might help to quote shorter lead time for the accepted ones, which might finally lead to a higher profitability, even if in the first glance we lose some demand.In the third contribution, we study a new framework for the lead time quotation and pricing problem under endogenous demand as we model the supply chain by two production stages in a tandem queue (M/M/1-M/M/1). In the literature with multi-firm setting, all papers considered that only one actor has production operations and the other actor has zero lead time. We investigated both the centralized and decentralized decision settings.For each problem studied, we formulated a profit-maximization model, where the profit consists of a revenue minus the production, storage and lateness penalty costs, and provides the optimum result (analytically or numerically). These resolutions led us to demonstrate new theoretical results (such as the expected lateness in an M/M/1/K, and the sufficient condition required to satisfy the global service constraint in a tandem queue by only satisfying the local service constraints). We also conducted numerical experiments and derived managerial insights.Parallèlement au prix, le délai de livraison est un facteur clé de compétitivité pour les entreprises. De plus les entreprises sont plus que jamais obligées de respecter ce délai promis. La combinaison du choix du prix et du délai promis implique de nouveaux compromis et offre de nombreuses perspectives. Un délai plus court peut entraîner une augmentation de la demande, mais augmente également le risque de livraison tardive et donc décourager les clients. A contrario un délai plus long ou un prix plus élevé entraîne généralement une baisse de la demande. Or malgré le rôle stratégique conjoint du prix et des délais et leurs impacts sur la demande, dans la littérature en gestion des opérations on suppose très généralement une demande exogène (fixée a priori) même si la conception de la chaîne impacte fortement les délais (localisation des sites, positionnement des stocks,..) et donc la demande. Nous nous sommes donc intéressés à ces choix de fixation des délais promis et du prix dans un contexte de demande endogène.La littérature traitant du choix du délai et du prix sous demande endogène a principalement considéré un contexte de fabrication à la commande (Make to Order). Un papier fondateur de Palaka et al en 1998 a présenté cette problématique avec une modélisation de l’entreprise par une file d’attente M/M/1 et nos travaux se placent dans la suite de ce travail. Notre revue de la littérature a permis d'identifier de nouvelles perspectives et nous proposons trois extensions dans cette thèse.Dans notre première contribution, en utilisant le cadre de Palaka et al, nous considérons que le coût de production est une fonction décroissante du délai. Dans tous les articles publiés dans ce contexte, le coût de production unitaire a été supposé constant. Pourtant en pratique, le coût de production unitaire dépend du délai promis, l'entreprise pouvant mieux gérer le processus de production et réduire les coûts de production en proposant des délais plus longs aux clients.Dans la deuxième contribution, nous considérons toujours le cadre de Palaka et al, mais modélisons l'entreprise comme une file d'attente M/M/1/K, pour laquelle la demande est donc rejetée s'il y a déjà K clients dans le système. Dans la littérature issue du travail de Palaka seule la file d'attente M/M/1 a été utilisée, ce qui signifie que tous les clients sont acceptés, ce qui peut entraîner de longues durées de séjour dans le système. Notre idée est basée sur le fait que rejeter certains clients, même si cela peut apparaitre dans un premier temps comme une perte de demande, pourrait aider à proposer un délai plus court pour les clients acceptés, et finalement conduire à une demande et donc un profit plus élevé.Dans la troisième contribution nous étudions un nouveau cadre pour le problème du délai et du prix en fonction de la demande endogène, en modélisant une chaîne logistique composée de deux étapes de production, modélisée par un réseau de files d’attente tandem (M/M/1-M/M/1). Dans la littérature avec ce cadre multi-entreprise, tous les articles ont considéré qu'un seul acteur avait des opérations de production, l'autre acteur ayant un délai nul. Nous avons étudié les scénarios centralisés et décentralisés.Pour chacun des nouveaux problèmes nous avons proposé des formulations maximisant le profit composé du revenu diminué des coûts de production, de stockage et pénalité de retard, et fourni des résolutions optimales, analytiques ou numériques. Ces résolutions nous ont amenés à démontrer de nouveaux résultats (retard moyen dans une M/M/1/K ; condition pour que des contraintes de service locales permettent d’assurer une contrainte de service globale dans un système en tandem). Nous avons mené des expériences numériques pour voir l’influence des différents paramètres

Customer rejection to guide lead time quotation and pricing decisions

International audienc

Expected lateness in an M/M/1/K queue

We calculate the expected lateness for a late job in an M/M/1/K queue (i.e., the expected waiting time in the system after a threshold lead time l, given that the waiting time is greater than l). The expected lateness for any given job can then be deduced immediately. Applications of our result include the calculation of the lateness penalty cost when a given lead time is quoted to the customers, such as in call centers or in some production systems