Decision behavior in supply chains with random production yields

Dealing with supply risks is one of the challenges of decision makers in supply chains as producing and sourcing become more and more complex. Theoretical research on different types of supply uncertainty as well as their management is well covered. Behavioral aspects in this context, however, have not received much attention so far. In this paper, we present an experimental study which aims at investigating how subjects make decisions of ordering and producing in the presence of random production yields at a supplier, i.e. production output is a random fraction of production input. Subjects were confronted with the situation of either the buyer or the supplier in a simple two-tier supply chain with deterministic demand and had to make the respective quantity decisions. Results show that buyers have a good understanding of the situation and are likely to follow a probabilistic choice rule. In addition to that, hedging against supply risks drives their behavior of over-ordering. Suppliers on the other hand start off with moderate production decisions but improve over time which indicates learning effects. Furthermore, the study shows that additional sharing of information on yield rates is no cure for inefficient behavior of the buyer

Supply chain coordination by contracts under binomial production yield

Supply chain coordination is enabled by adequately designed contracts so that decision making by multiple actors avoids efficiency losses in the supply chain. From the literature it is known that in newsvendor-type settings with random demand and deterministic supply the activities in supply chains can be coordinated by sophisticated contracts while the simple wholesale price contract fails to achieve coordination due to the double marginalization effect. Advanced contracts are typically characterized by risk sharing mechanisms between the actors, which have the potential to coordinate the supply chain. Regarding the opposite setting with random supply and deterministic demand, literature offers a considerably smaller spectrum of solution schemes. While contract types for the well-known stochastically proportional yield have been analyzed under different settings, other yield distributions have not received much attention in the literature so far. However, practice shows that yield types strongly depend on the industry and the production process that is considered. As consequence, they can deviate very much from the specific case of a stochastically proportional yield. This paper analyzes a buyer-supplier supply chain in a random yield, deterministic demand setting with production yield of a binomial type. It is shown how under binomially distributed yields risk sharing contracts can be used to coordinate buyer's ordering and supplier's production decision. Both parties are exposed to risks of overproduction and under-delivery. In contrast to settings with stochastically proportional yield, however, the impact of yield uncertainty can be quite different in the binomial yield case. Under binomial yield, the output uncertainty decreases with larger production quantities while it is independent from lot sizes under stochastically proportional yield. Consequently, the results from previous contract analyses on other yield types may not hold any longer. The current analytical study reveals that, like under stochastically proportional yield, coordination is impeded by double marginalization if a simple wholesale price contract is applied. However, more sophisticated contracts which penalize or reward the supplier can change the risk distribution so that supply chain coordination is possible also under binomial yield. In this context, many contract properties from planning under stochastically proportional yield carry over. Nevertheless, numerical examples reveal that a misspecification of the yield type can considerably downgrade the extent of supply chain coordination

Supply chain coordination by risk sharing contracts under random production yield and deterministic demand

From a large body of research studies we know that properly designed contracts can facilitate coordinated decision making of multiple actors in a supply chain (SC) so that efficiency losses for the SC as a whole can be avoided. In a newsvendor-type SC with stochastic demand it is well-known that due to the double marginalization effect a simple wholesale price contract will not achieve coordination. More complex contracts, however, do so, especially those which enable an appropriate sharing of risks between the SC actors. While the effectiveness of risk sharing contracts is well understood for SC situations with random demand and reliable supply, we do not know much about respective SC coordination problems if demand is deterministic, but supply is unreliable due to random production yield

Supply chain coordination by contracts under binomial production yield

Supply chain coordination is enabled by adequately designed contracts so that decision making by multiple actors avoids efficiency losses in the supply chain. From literature it is known that in newsvendor type settings with random demand and deterministic supply the activities in supply chains can be coordinated by sophisticated contracts while the simple wholesale price contract fails to achieve coordination due to the double marginalization effect. Advanced contracts are typically characterized by risk sharing mechanisms between the actors, which have the potential to coordinate the supply chain. Regarding the opposite setting with random supply and deterministic demand, literature offers a considerably smaller spectrum of solution schemes. While contract types for the well-known stochastically proportional yield have been analyzed under different settings, other yield distributions have not received much attention in literature so far. However, practice shows that yield distributions strongly depend on the industry and the production process that is considered.This paper analyzes a buyer-supplier supply chain in a random yield, deterministic demand setting. It is shown how under binomially distributed yields risk sharing contracts can be used to coordinate buyer’s ordering and supplier’s production decision. Both parties are exposed to risks of overproduction and under-delivery. In contrast to settings with stochastically proportional yield, however, the impact of yield uncertainty can be quite different in the binomial yield case. Under binomial yield, the output uncertainty decreases with larger production quantities while it is independent from lot sizes under stochastically proportional yield. Consequently, the results from previous contract analyses on other yield types may not hold any longer. The current study reveals that, like under stochastically proportional yield, coordination is impeded by double marginalization if a simple wholesale price contract is applied. However, more sophisticated contracts which penalize or reward the supplier can change the risk distribution so that supply chain coordination is possible under binomial yield. Thus, even though risk diminishes with larger lot sizes, the supply chain benefits from advanced risk sharing contracts because they trigger coordinated behavior

Supply chain coordination by risk sharing contracts under random production yield and deterministic demand

From a large body of research studies we know that properly designed contracts can facilitate coordinated decision making of multiple actors in a supply chain (SC) so that efficiency losses for the SC as a whole can be avoided. In a newsvendor-type SC with stochastic demand it is well-known that due to the double marginalization effect a simple wholesale price contract will not achieve coordination. More complex contracts, however, do so, especially those which enable an appropriate sharing of risks between the SC actors. While the effectiveness of risk sharing contracts is well understood for SC situations with random demand and reliable supply, we do not know much about respective SC coordination problems if demand is deterministic, but supply is unreliable due to random production yield. For a buyer-supplier SC representing the latter SC setting, it is analyzed how the distribution of risks affects the coordination of buyer's ordering and supplier's production decision. In a basic random yield, deterministic demand setting both parties are exposed to risks of over-production or underdelivery, respectively, if a simple wholesale price contract is applied. The resulting risk distribution will always be such that SC coordination cannot be achieved. It can be shown, however, that two more sophisticated contract types with penalty and reward elements for the supplier can change the risk distribution in such a way that SC coordination is possible under random yield. Additionally, it is proved that also the wholesale price contract will guarantee SC coordination if the supplier has a second (emergency) procurement source at her disposal that is more costly, but reliable. Moreover, restricting oneself to wholesale price contracts it is shown that it can be beneficial to both parties to utilize this emergency source even if it is not profitable from a SC perspective.Supply chain coordination, contracts, random yield, risk sharing, emergency procurement

Stress hormones or general well-being are not altered in immune-deficient mice lacking either T- and B- lymphocytes or Interferon gamma signaling if kept under specific pathogen free housing conditions

It is controversially discussed whether immune-deficient mice experience severity in the absence of infection. Because a comprehensive analysis of the well-being of immune-deficient mice under specific pathogen free conditions is missing, we used a multi-parametric test analyzing, corticosterone, weight, nest building and facial expression over a period of 9 month to determine the well-being of two immune-deficient mouse lines (recombination activating gene 2- and interferon gamma receptor-deficient mice). We do not find evidence for severity when comparing immune-deficient mice to their heterozygous immune-competent littermates. Our data challenge the assumption that immune-deficiency per se regardless of housing conditions causes severity. Based on our study we propose to use objective non-invasive parameters determined by laboratory animal science for decisions concerning severity of immune-deficient mice

Development of an open technology sensor suite for assisted living: a student-led research project.

Many countries have a rapidly ageing population, placing strain on health services and creating a growing market for assistive technology for older people. We have, through a student-led, 12-week project for 10 students from a variety of science and engineering backgrounds, developed an integrated sensor system to enable older people, or those at risk, to live independently in their own homes for longer, while providing reassurance for their family and carers. We provide details on the design procedure and performance of our sensor system and the management and execution of a short-term, student-led research project. Detailed information on the design and use of our devices, including a door sensor, power monitor, fall detector, general in-house sensor unit and easy-to-use location-aware communications device, is given, with our open designs being contrasted with closed proprietary systems. A case study is presented for the use of our devices in a real-world context, along with a comparison with commercially available systems. We discuss how the system could lead to improvements in the quality of life of older users and increase the effectiveness of their associated care network. We reflect on how recent developments in open source technology and rapid prototyping increase the scope and potential for the development of powerful sensor systems and, finally, conclude with a student perspective on this team effort and highlight learning outcomes, arguing that open technologies will revolutionize the way in which technology will be deployed in academic research in the future.This is the final version of the article. It first appeared from Royal Society Publishing via http://dx.doi.org/10.1098/rsfs.2016.001

Reducing the environmental impact of surgery on a global scale: systematic review and co-prioritization with healthcare workers in 132 countries

Abstract Background Healthcare cannot achieve net-zero carbon without addressing operating theatres. The aim of this study was to prioritize feasible interventions to reduce the environmental impact of operating theatres. Methods This study adopted a four-phase Delphi consensus co-prioritization methodology. In phase 1, a systematic review of published interventions and global consultation of perioperative healthcare professionals were used to longlist interventions. In phase 2, iterative thematic analysis consolidated comparable interventions into a shortlist. In phase 3, the shortlist was co-prioritized based on patient and clinician views on acceptability, feasibility, and safety. In phase 4, ranked lists of interventions were presented by their relevance to high-income countries and low–middle-income countries. Results In phase 1, 43 interventions were identified, which had low uptake in practice according to 3042 professionals globally. In phase 2, a shortlist of 15 intervention domains was generated. In phase 3, interventions were deemed acceptable for more than 90 per cent of patients except for reducing general anaesthesia (84 per cent) and re-sterilization of ‘single-use’ consumables (86 per cent). In phase 4, the top three shortlisted interventions for high-income countries were: introducing recycling; reducing use of anaesthetic gases; and appropriate clinical waste processing. In phase 4, the top three shortlisted interventions for low–middle-income countries were: introducing reusable surgical devices; reducing use of consumables; and reducing the use of general anaesthesia. Conclusion This is a step toward environmentally sustainable operating environments with actionable interventions applicable to both high– and low–middle–income countries