Nash Game Model for Optimizing Market Strategies, Configuration of Platform Products in a Vendor Managed Inventory (VMI) Supply Chain for a Product Family

This paper discusses how a manufacturer and its retailers interact with each other to optimize their product marketing strategies, platform product configuration and inventory policies in a VMI (Vendor Managed Inventory) supply chain. The manufacturer procures raw materials from multiple suppliers to produce a family of products sold to multiple retailers. Multiple types of products are substitutable each other to end customers. The manufacturer makes its decision on raw materials’ procurement, platform product configuration, product replenishment policies to retailers with VMI, price discount rate, and advertising investment to maximize its profit. Retailers in turn consider the optimal local advertising and retail price to maximize their profits. This problem is modeled as a dual simultaneous non-cooperative game (as a Nash game) model with two sub-games. One is between the retailers serving in competing retail markets and the other is between the manufacturer and the retailers. This paper combines analytical, iterative and GA (genetic algorithm) methods to develop a game solution algorithm to find the Nash equilibrium. A numerical example is conducted to test the proposed model and algorithm, and gain managerial implications

Optimal Zone Boundaries for Two-class-based Compact 3D AS/RS

Compact, multi-deep (3D), Automated Storage and Retrieval Systems (AS/RS) are becoming more common, due to new technologies, lower investment costs, time efficiency and compact size. Decision-making research on these systems is still in its infancy. We study a particular compact system with rotating conveyors for the depth movement and a Storage/Retrieval (S/R) machine for the horizontal and vertical movement of unit loads. W

Sequencing Heuristics for Storing and Retrieving Unit Loads in 3D Compact Automated Warehousing Systems

Sequencing unit load retrieval requests has been studied extensively in literature for conventional single-deep automated warehousing systems. A proper sequence can greatly reduce the makespan when carrying out a group of such requests. Although the sequencing problem is NP-hard some very good heuristics exist. Surprisingly the problem has not yet been investigated for compact (multi-deep) storage systems, which have greatly

On the Suboptimality of Full Turnover-Based Storage

In the past thirty years the full turnover-based storage policy as described by Hausman et al. (1976, Management Science 22(6)) has been widely claimed to outperform the commonly used ABC class-based storage policy, in terms of the resulting average storage and retrieval machine travel time. In practice however, ABC storage is the dominant policy. Hausman et al. (1976) model the turnover-based policy under the unrealistic assumption of shared storage, i.e. the stor

Optimal Storage Rack Design for a 3D Compact AS/RS with Full Turnover-Based Storage

Compact, multi-deep (3D) automated storage and retrieval systems (AS/RS) are becoming increasingly popular for storing products with relatively low turnover on a compact area. An automated storage/retrieval crane takes care of movements in the horizontal and vertical direction in the rack, and a gravity conveying mechanism takes care of the depth movement. An important question is how to layout such systems to minimize the pr

Open Location Management in Automated Warehousing Systems

A warehouse needs to have sufficient open locations to be able to store incoming shipments of various sizes. In combination with ongoing load retrievals open locations gradually spread over the storage area. Unfavorable positions of open locations negatively impact the average load retrieval times. This paper presents a new method to manage these open locations such that the average system travel time for processing a block o

Leader-follower Game in VMI System with Limited Production Capacity Considering Wholesale and Retail Prices

VMI (Vendor Managed Inventory) is a widely used cooperative inventory policy in supply chains in which each enterprise has its autonomy in pricing. This paper discusses a leader-follower Stackelberg game in a VMI supply chain where the manufacturer, as a leader, produces a single product with a limited production capacity and delivers it at a wholesale price to multiple different retailers, as the followers, who then sell the product in dispersed and independent markets at retail prices. An algorithm is then developed to determine the equilibrium of the Stackelberg game. Finally, a numerical study is conducted to understand the influence of the Stackelberg equilibrium and market related parameters on the profits of the manufacturer and its retailers. Through the numerical example, our research demonstrates that: (a) the market related parameters have significant influence on the manufacturer’ and its retailers’ profits; (b) a retailer’s profit ma

Response time analysis of a live-cube compact storage system with two storage classes

We study a next generation of storage systems: live-cube compact storage systems. These systems are becoming increasingly popular, due to their small physical and environmental footprint paired with a large storage space. At each level of a live-cube system, multiple shuttles take care of themovement of unit loads in the x and y directions. When multiple empty locations are available, the shuttles can cooperate to create a virtual aisle for the retrieval of a desired unit load. A lift takes care of the movement across different levels in the z-direction. Two-class-based storage, in which high turnover unit loads are stored at storage locations closer to the Input/Output point, can result in a short response time. We study two-class-based storage for a live-cube system and derive closed-form formulas for the expected retrieval time. Although the system needs to be decomposed into several cases and sub-cases, we eventually obtain simple-to-use closed-form formulas to evaluate the performance of systems with any configuration and first zone boundary. Continuous-space closed-form formulas are shown to be very close to the results obtained for discretespace live-cube systems. The numerical results show that two-class-based storage can reduce the average response time of a live-cube system by up to 55% compared with random storage for the instances tested

Understanding the Impact of Indirect System Use in the hospital: A Control Perspective

In the hospital, designated system users (i.e., principal physicians) are usually found to delegate system-related tasks to other people (i.e., agent physicians). This behavior is termed as indirect use. Despite the prevalence of indirect use, the understanding of its clinical impacts is limited. In this research, we first propose different effects of indirect use on clinical care quality and physician–patient interaction care quality. We then draw on the agency theory and organization control literature to identify the moderating effects of three control mechanisms: input control, process control, and outcome control. A total of 242 physicians from a general public hospital were surveyed to verify the proposed hypotheses. The results show that three control mechanisms moderate the impacts of indirect use in different manners. Implications and plan for future research are then discussed

Optimal two-class-based storage in a live-cube compact storage system

Live-cube compact storage systems realize high storage space utilization and high throughput, due to full automation and independent movements of unit loads in three-dimensional space. Applying an optimal two-class-based storage policy where high-turnover products are stored at locations closer to the Input/Output point significantly reduces the response time. Live-cube systems are used in various sectors, such as warehouses and distribution centers, parking systems, and container yards. The system stores unit loads, such as pallets, cars, or containers, multi-deep at multiple levels of storage grids. Each unit load is located on its own shuttle. Shuttles move unit loads at each level in the x and y directions, with a lift taking care of the movement in the z-direction. Movement of a requested unit load to the lift location is comparable to solving a Sam Loyd’s puzzle game where 15 numbered tiles move in a 4 × 4 grid. However, with multiple empty locations, a virtual aisle can be created to shorten the retrieval time for a requested unit load. In this article, we optimize the dimensions and zone boundary of a two-class live-cube compact storage system leading to a minimum response time. We propose a mixed-integer nonlinear model that consists of 36 sub-cases, each representing a specific configuration and first zone boundary. Properties of the optimal system are used to simplify the model without losing any optimality. The overall optimal solutions are then obtained by solving the remaining sub-cases. Although the solution procedure is tedious, we eventually obtain two sets of closed-form expressions for the optimal system dimensions and first zone boundary for any desired system size. In addition, we propose an algorithm to obtain the optimal first zone boundary for situations where the optimal system dimensions cannot be achieved. To test the effectiveness of optimal system dimensions and first zone boundary on the performance of a two-class-based live-cube system, we perform a sensitivity analysis by varying the ABC curve, system size, first zone size, and shape factor. The results show that for most cases an optimal two-class-based storage outperforms random storage, with up to 45% shorter expected retrieval time