Serial Production/Distribution Systems Under Service Constraints

We analyze the problem of minimizing average inventory costs subject to fill-rate type of service-level constraints in serial and assembly production/distribution systems. We propose optimal and heuristic procedures to solve this problem. Our model and solution procedures can be used to manage the fill rate or fill rate within a "time window" service measures. We also relate our service-constrained model to the traditional model with back-order costs and show that it is possible to prespecify backorder cost rates to achieve desired service levels. We explore the inventory cost impact of such a practice, and we find that the cost penalty can be very high.Inventory/Production, Multistage, Serial, Fill Rate, Base-Stock Policy, Solution and Heuristics

Product Differentiation and Capacity Cost Interaction in Time and Price Sensitive Markets

In this paper, we study a profit-maximizing firm selling two substitutable products in a price and time sensitive market. The products differ only in their prices and delivery times. We assume that there are dedicated capacities for each product and that there is a standard industry delivery time for the regular (slower) product. The objective of the firm is to determine the delivery time of the express (faster) product and appropriately price the two products, taking into consideration the impact of delivery time reduction on capacity requirements and costs. We develop a model that integrates pricing and delivery time decisions with capacity requirements and costs, and study scenarios where the firm is constrained in capacity for none, one, or both product(s). We show how product differentiation decisions are influenced by capacity costs, and how the firm should adapt its differentiation strategy in response to a change in its operating dynamics. We first identify a market characteristic that governs the optimal pricing structure. We then show that the degree of product differentiation depends on both the absolute, as well as the relative values of the capacity costs. Provided that the capacity cost differential remains the same, higher capacity costs induce less time differentiation and less price differentiation. An increase in capacity cost differential increases price differentiation, but decreases time differentiation. The optimal prices depend, in addition to the above, on the market characteristic. We find that prices can actually decrease when the firm incurs capacity-related costs. We also explore the impact of substitutability on product differentiation, and illustrate our results in a numerical study.product differentiation, pricing, delivery-time guarantees, time-based competition, capacity management, substitution

Investing in Product Reusability: The Effect of Remanufacturing Cost and Demand Uncertainties

Uncertainty in the supply of used products- both in terms of quantity and quality- has been identified by academics and practitioners as one of the most important challenges for firms to invest in closed-loop systems and product reusability. This article focuses on two types of uncertainties and their impact on these investments. Firstly we analyze the impact of remanufacturing cost uncertainty, which is primarily due to the variability in the quality condition of returns. Secondly, we examine the impact of uncertainty in market demand, which is among the lead causes of variability in the quantity of returns. In a 2-period setting, we optimize a monopolist’s expected discounted profits and determine the optimal level of investment in reusability as well as the market prices. We find that in the case where there is uncertainty in remanufacturing cost, the level of investment in reusability can increase with uncertainty. In addition, we identify the conditions under which higher demand uncertainty leads to reductions in the level of investment in reusability. Moreover, we find that the manufacturer’s pricing decisions will be such that the difference between the remanufacturing supply of the first period and the second period demand is minimized

Optimal Prices and Trade-in Rebates for Durable, Remanufacturable Products

Most durable products have two distinct types of customers: first-time buyers and customers who already own the product, but are willing to replace it with a new one or purchase a second one. Firms usually adopt a price-discrimination policy by offering a trade-in rebate only to the replacement customers to hasten their purchase decisions. Any return flow of products induced by trade-in rebates has the potential to generate revenues through remanufacturing operations. In this paper, we study the optimal pricing/trade-in strategies for such durable, remanufacturable products. We focus on the scenario where the replacement customers are only interested in trade-ins. In this setting, we study three pricing schemes: (i) uniform price for all customers, (ii) age-independent price differentiation between new and replacement customers (i.e., constant rebate for replacement customers), and (iii) age-dependent price differentiation between new and replacement customers (i.e., age-dependent rebates for replacement customers). We characterize the roles that the durability of the product, the extent of return revenues, the age profile of existing products in the market, and the relative size of the two customer segments play in shaping the optimal prices and the amount of trade-in rebates offered. Throughout the paper we highlight the operational decisions that might influence the above factors, and we support our findings with real-life practices. In an extensive numerical study, we compare the profit potential of different pricing schemes and quantify the reward (penalty) associated with taking into account (ignoring) customer segmentation, the price-discrimination option, return revenues, and the age profile of existing products. On the basis of these results, we are able to identify the most favorable pricing strategy for the firm when faced with a particular market condition and discuss implications on the life-cycle pricing of durable, remanufacturable products.trade-in rebates, pricing, remanufacturing, durable products, product-age profile

Retail-Collection Network Design under Deposit-Refund

suggestions of an anonymous referee were very helpful in improving the paper. This submission was handled by Gilbert Laporte. * Corresponding Author

A rapid method for detection of genetically modified organisms based on magnetic separation and surface-enhanced Raman scattering

In this study, a new method combining magnetic separation (MS) and surface-enhanced Raman scattering (SERS) was developed to detect genetically modified organisms (GMOs). An oligonucleotide probe which is specific for 35 S DNA target was immobilized onto gold coated magnetic nanospheres to form oligonucleotide-coated nanoparticles. A self assembled monolayer was formed on gold nanorods using 5,5'-dithiobis (2-nitrobenzoic acid) (DTNB) and the second probe of the 35 S DNA target was immobilized on the activated nanorod surfaces. Probes on the nanoparticles were hybridized with the target oligonucleotide. Optimization parameters for hybridization were investigated by high performance liquid chromatography. Optimum hybridization parameters were determined as: 4 mu M probe concentration, 20 min immobilization time, 30 min hybridization time, 55 degrees C hybridization temperature, 750 mM buffer salt concentration and pH: 7.4. Quantification of the target concentration was performed via SERS spectra of DTNB on the nanorods. The correlation between the target concentration and the SERS signal was found to be linear within the range of 25-100 nM. The analyses were performed with only one hybridization step in 40 min. Real sample analysis was conducted using Bt-176 maize sample. The results showed that the developed MS-SERS assay is capable of detecting GMOs in a rapid and selective manner