Wood-based construction project supplier selection under uncertain starting date

There is a growing interest in supply management systems in today's competitive business environment. Importance of implementing supply management systems especially in home construction industry is due to the fact that several risks arising from different sources can adversely affect the project financially or its timely completion. Some risks of construction projects are out of managers' control while other risks such as supply related ones can usually be controlled and directed by effective managerial tactics. In this paper, we address the supplier selection problem (SSP) in wood-based construction industry (housing projects) in the presence of project commencement uncertainties. Based on the suppliers' (vendors') reaction towards these uncertainties in the delivery time, we explore two cases: (a) supplier selection with buyer penalty for a delay (SSPD) where the price of product increases with the delay; (b) supplier selection with quantity reduction for a buyer delay (SSQRD). Three heuristic-based supplier selection approaches are proposed and tested on randomly generated data sets. The proposed approaches show promising result

Modelling and Analysis of Hub-and-Spoke Networks under Stochastic Demand and Congestion

Motivated by the strategic importance of congestion management, in this paper we present a model to design hub-and-spoke networks under stochastic demand and congestion. The proposed model determines the location and capacity of the hub nodes and allocate non-hub nodes to these hubs while minimizing the sum of the ?xed cost, transportation cost and the congestion cost. In our approach, hubs are modelled as spatially distributed M/G/1 queues and congestion is captured using the expected queue lengths at hub facilities. A simple transformation and a piecewise linear approximation technique are used to linearize the resulting nonlinear model. We present two solution approaches: an exact method that uses a cutting plane approach and a novel genetic algorithm based heuristic. The numerical experiments are conducted using CAB and TR datasets. Analysing the results obtained from a number of problem instances, we illustrate the impact of congestion cost on the network topology and show that substantial reduction in congestion can be achieved with a small increase in total cost if congestion at hub facilities is considered at the design stage. The computational results further confirm the stability and e?ciency of both exact and heuristic approaches

Cost-sharing mechanism for product quality improvement in a supply chain under competition

For the growing competition in the modern sophisticated business environment, there is an increasing trend to launch new products or to improve the quality of the end products in order to attract more consumers. But the rising costs or uncertainties for this innovation require firms to collaborate with each other. In this paper, we study how a retailer and each of two competing manufacturers can be benefited by collaborative product quality improvement strategies in a supply chain. In our model, two competing manufacturers invest in the quality improvement of their respective product and a common retailer sells those higher quality substitutable products to the end consumers. To incentivize the manufacturers in product quality improvement initiatives, we address cost-sharing mechanisms between the retailer level and the manufacturer level. To focus on the importance of collaborative product quality improvement, we study the quality improvement initiatives both in collaborative and non-collaborative scenarios. Through game-theoretic framework, we address mainly three different contract scenarios: (1) WP contract in which both manufacturers accept wholesale price contract, (2) CSC contract in which both manufacturers accept cost-sharing contract, and (3) WC contract in which only one manufacturer accepts cost-sharing contract and the other accepts wholesale price contract. Depending on the mechanism how the retailer decides its cost-sharing proportion with the manufacturer, we further develop and analyze two models of cost-sharing for each of CSC and WC contracts. Our results show that both cost-sharing contracts result in higher quality improvement levels and higher profits in the supply chain as compared to WP contract. In addition, the retailer can enhance his profit level by reducing the differentiation between retail prices (intense price competition) of two products. On the contrary, both manufacturers can sufficiently increase their profit levels by raising the differentiation between two products with respect to quality (lower quality competition). We further investigate those scenarios in which the retailer would be interested in sharing more quality investment costs with the manufacturers

Production Planning and Scheduling with Time-Related Processing Cost Considerations for a Heat Treatment Shop

Due to production customization and diversification, many manufacturing companies face greater challenges to cope with uncertainties related to material supply, market demands and increased cost. The purpose of this study is to optimize the production process in a multi-product heat treatment shop to reduce production cost. We consider a multi-item multi-level production planning and scheduling problem in this research with production cost related to the waiting time of the components to be processed. A non- linear integer programming model is developed to describe the considered problem. After linearization, the model is solved to optimality using IBM® ILOG® CPLEX® Optimization Studio. We also propose a heuristic solution method to solve the considered problem for fast solutions of much larger problem sizes. Computational results of numerical examples indicate the mathematical model generates optimal results in capturing detailed problem features such as larger product variety which can be missed in using the heuristic method. The results also show that the developed mathematical model can be used to solving various production planning and scheduling problems with practical considerations such as time-related manufacturing cost functions

Roll assortment optimization in a paper mill: An integer programming approach

Fine paper mills produce a variety of paper grades to satisfy demand for a large number of sheeted products. Huge reels of different paper grades are produced on a cyclical basis on paper machines. These reels are then cut into rolls of smaller size which are then either sold as such, or sheeted into finished products in converting plants. A huge number of roll sizes would be required to cut all finished products without trim loss and they cannot all be inventoried. An assortment of rolls is inventoried with the implication that the sheeting operations may yield trim loss. The selection of the assortment of roll sizes to stock and the assignment of these roll sizes to finished products have a significant impact on performances. This paper presents a model to decide the parent roll assortment and assignments to finished products based on these products demand processes, desired service levels, trim loss and inventory holding costs. Risk pooling economies made by assigning several finished products to a given roll size is a fundamental aspect of the problem. The overall model is a binary non-linear program. Two solution methods are developed: a branch and price algorithm based on column generation and a fast pricing heuristic, and a marginal cost heuristic. The two methods are tested on real data and also on randomly generated problem instances. The approach proposed was implemented by a large pulp and paper company

A fuzzy multicriteria approach for evaluating environmental performance of suppliers

In this paper, we present a fuzzy multicriteria approach for evaluating environmental performance of suppliers. The proposed approach consists of three steps. The first step involves identification of criteria for assessing environmental performance of suppliers. In step 2, the experts rate the selected criteria and the various alternatives (suppliers) against each of the criteria. Linguistic assessments are used to rate the criteria and the alternatives. These linguistic ratings are then combined through fuzzy TOPSIS to generate an overall performance score for each alternative. The alternative with the highest score is chosen as the one with highest environmental performance. The advantage of using fuzzy TOPSIS is that it distinguishes between Benefit (the more the better) and the Cost (the less the better) category criteria and selects solutions that are close to the positive ideal solutions and far from negative ideal solutions. In step 3, sensitivity analysis is conducted to evaluate the influence of criteria weights on the environmental performance evaluation of suppliers. The strength of the proposed approach is its practical applicability and ability to provide solution under partial or lack of quantitative information. A numerical application is provided to demonstrate the proposed approach.Multicriteria decision making Fuzzy theory TOPSIS Supplier selection Environmental performance

A continuous model for supply planning of assembly systems with stochastic component procurement times

International audienceThis paper studies a customized product assembly scenario where some components cannot be stocked due to high component cost and risk. We consider the case where these key components are ordered after a demand has been registered with a promised delivery date. Component lead-times are stochastic and associated distribution function is known in advance. The objective is to determine the ordering time for each component such as to minimize the sum of expected holding and backlogging costs. An approach to solve this problem is proposed and the algorithm is tested on a randomly generated data set