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Visit the Taylor & Francis Web site at http://www.com and the Auerbach Web site at http://www.com Saunder August 25, 2010 13:43 AU945X˙C000 Contents Preface. xi About the Editors.xix Review Board. xxiii SECTION I INDUSTRIAL AND SERVICE APPLICATIONS OF THE SUPPLY CHAIN 1 Multicriteria Decision Making in Ethanol Production Problems: A Fuzzy Goal Programming Approach. KLIMBERG AND SHEILA M.
LAWRENCE 2 From Push to Pull: The Automation and Heuristic Optimization of a Caseless Filler Line in the Dairy Industry. SEGULIN 3 Optimization of Medical Services: The Supply Chain and Ethical Implications. MIORI AND VIRGINIA M. MIORI 4 Using Hierarchical Planning to Exploit Supply Chain Flexibility: An Example from the Norwegian Meat Industry .47 PETER SCH ÜTZ, ASGEIR TOMASGARD, AND KRISTIN TOLSTAD UGGEN 5 Transforming U.
Army Supply Chains: An Analytical Architecture for Management Innovation. PARLIER v Saunder August 25, 2010 13:43 AU945X˙C000 vi Contents SECTION II ANALYTIC PROBABILISTIC MODELS OF SUPPLY CHAIN PROBLEMS 6 A Determination of the Optimal Level of Collaboration between a Contractor and Its Suppliers under Demand Uncertainty .97 SEONG-HYUN NAM, JOHN VITTON, AND HISASHI KURATA 7 Online Auction Models and Their Impact on Sourcing and Supply Management. KROS AND CHRISTOPHER M. KELLER 8 Analytical Models for Integrating Supplier Selection and Inventory Decisions.
KESKIN 9 Inventory Optimization of Small Business Supply Chains with Stochastic Demand .151 KATHLEEN CAMPBELL, GERARD CAMPAGNA, ANTHONY COSTANZO, AND CHRISTOPHER MATTHEWS SECTION III OPTIMIZATION MODELS OF SUPPLY CHAIN PROBLEMS 10 A Dynamic Programming Approach to the Stochastic Truckload Routing Problem. MIORI 11 Modeling Data Envelopment Analysis (DEA) Efficient Location/Allocation Decisions. RATICK, VINAY TAVVA, SASANKA VUYYURU, AND DANIEL MRAZIK 12 Sourcing Models for End-of-Use Products in a Closed-Loop Supply Chain. POCHAMPALLY AND SURENDRA M.
GUPTA 13 A Bi-Objective Supply Chain Scheduling .243 TADEUSZ SAWIK Saunder August 25, 2010 13:43 AU945X˙C000 Contents vii 14 Applying Data Envelopment Analysis and Multiple Objective Data Envelopment Analysis to Identify Successful Pharmaceutical Companies. SILLUP, GEORGE WEBSTER, HAROLD RAHMLOW, AND KENNETH D.297 Saunder August 25, 2010 13:43 AU945X˙C000 Saunder August 25, 2010 13:43 AU945X˙C000 Preface This volume is a blind-refereed, multi-authored volume. The objective of this volume is to present state-of-the-art studies in the areas of manufacturing, distribution, and transportation to solve significant problems within the supply chain integration process. This volume focuses on research that integrates the problems of production, distribution, and transportation.
Tactical models support the mid-level decision-making processes that typically extend into a planning horizon of 6 to 18 months. The models featured address a number of areas. High-level production schedules describe the equipment to be used and the hours that a production plant will operate. Product sourcing models assign customers to the most cost-efficient production plant or distribution center as a source of their orders.
Network alignment models assist in determining the products to be produced in each production plant, and stored in each distribution center. Additional tactical models focus on transportation operations with consistent demand. These operations will create static shipment schedules designed to be fol- lowed week after week. The physical layout of distribution centers is also a tactical decision.
The product lines stored may change by season, requiring reexamination of product storage locations. The goal is the minimization of total distance traveled within the distribution center. The area of inventory planning is a tactical area that has been the subject of substantial research. Inventory strategies begin with the determination of how much inventory to carry and at what inventory level to reorder the products.
At their most complex level, inventory strategies address the possible postponement of final production processes in order to reduce costs. This is most common when standard subassemblies are used for many specialized final products. The subassemblies are lower valued and therefore less expansive to carry. The final production is postponed until an order has been placed for specific products.
Furthermore, operational models involve detailed or day-to-day operations and scheduling processes. The planning horizon for these models ranges from a week to several months. Manufacturing operations cannot effectively run without detailed planning models that schedule the raw material and intermediate product shipments. ix Saunder August 25, 2010 13:43 AU945X˙C000 x Preface These schedules feed into another class of models that schedules the production at these manufacturing facilities.
Production schedules include the changeover between products and maintenance of equipment. In cases where multiple production lines are employed, the scheduling task grows very quickly in complexity. Operational planning in the transportation and distribution areas of the supply chain examine the consolidation of small shipments and the breaking down of larger shipments with the goal of cost-efficiency in transportation. In addition, models are addressed that create low-cost truck routes and assignment of various capacity vehicles to these routes.
They also meet delivery time windows required by customers. Both tactical and operational models rely on good quality forecasts of demand. Stochastic customer demand, coordination of supply chain functions, and solution algorithms are of a critical nature and are highlighted in this volume. The overall integration of transportation, distribution, and production involves the following crossovers: Production and outbound transportation Inbound transportation and production Inbound transportation, production, and outbound transportation This book is a compilation of scholarly research work involving the utilization of the discussed supply chain concepts, which address a wide variety of organizational issues.
It is comprised of a variety of noteworthy works emanating not only from the academic spectrum, but also from business practitioners on a more limited basis. The book is divided into three sections: Section I: “Industrial and Service Applications of the Supply Chain” Section II: “Analytic Probabilistic Models of Supply Chain Problems” Section III: “Optimization Models of Supply Chain Problems” Saunder August 25, 2010 13:43 AU945X˙C000 Introduction Section I: Industrial and Service Applications of the Supply Chain Chapter 1, “Multicriteria Decision Making in Ethanol Production Problems: A Fuzzy Goal Programming Approach,” applies a multiple objective approach to the optimization of the supply chain over the echelon of material sources, processing mills, and customers for the production of ethanol and associated by-products. The multiple objectives include cost minimization at all levels, as well as the minimization of environmental impact resulting from ethanol production. Chapter 2, “From Push to Pull: The Automation and Heuristic Optimization of a Caseless Filler Line in the Dairy Industry,” applies cost minimization in the transition of a dairy supply chain.
The move from the manual “push” supply chain to automated “pull” supply chain not only provided greatly improved internal efficiencies, but also facilitated the opening of new customer channels for the dairy. Despite the fact that supply chain management has been applied extensively across manufacturing and production sectors, more traditional industries, such as the dairy industry, have lagged. Chapter 3, “Optimization of Medical Services: The Supply Chain and Ethical Implications,” provides a positive basis for the resolution of ethical questions while building an alternative “production style” supply chain for the health-care industry. This new supply chain is simulated and validated for continuing work in optimiza- tion.
Manufacturing and service supply chain optimization models have always run parallel paths with little investigation into the benefits of applying the opposing techniques. While true in all sectors, it is especially the case in the health-care sector where issues of ethical treatment of patients are paramount. Chapter 4, “Using Hierarchical Planning to Exploit Supply Chain Flexibility: An Example from the Norwegian Meat Industry,” provides a supply chain opti- mization example from the Norwegian meat industry. One of the greatest challenges in developing optimal solutions within the supply chain setting is the existence of stochastic elements in the supply chain.
Whether changes occur on a daily basis or less frequently over time, a hierarchical approach to optimal supply chains offers sufficient flexibility to manage these changes. xi Saunder August 25, 2010 13:43 AU945X˙C000 xii Introduction Chapter 5, “Transforming U. Army Supply Chains: An Analytical Architecture for Management Innovation,” addresses the need for the U. Army to transform from the existing logistics approach to the challenges faced in the world today.
It examines the current structure, proposes alternative models, and highlights challenges that will be faced in the ultimate transformation of the U. Army supply chains. It is widely understood that the most challenging logistics operations exist within the armed forces. Since World War II, operations research has played a significant role in these operations.
Section II: Analytic Probabilistic Models of Supply Chain Problems Chapter 6, “A Determination of the Optimal Level of Collaboration between a Contractor and Its Suppliers under Demand Uncertainty,” focuses on the analysis of the collaboration level connected to demand uncertainty and its associated economic costs, based on the number of suppliers utilized by a contractor to maximize the supply chain profile. Chapter 7, “Online Auction Models and Their Impact on Sourcing and Supply Management,” concerns how business relies on online auctions to enhance efficiency and reduce costs within a supply chain. The chapter focuses on the product sourcing problems, and details existing bidding models and organizational dynamics that may influence or be employed to improve bidding strategy. Chapter 8, “Analytical Models for Integrating Supplier Selection and Inventory Decisions,” focuses on analytical models for integrating supplier selection and inven- tory decisions.
The models involve such factors as long-term relationships, quality, delivery performance, quantity discounts, replenishment quantity and timing, and procurement and contractual costs. Chapter 9, “Inventory Optimization of Small Business Supply Chains with Stochastic Demand,” examines the supply chain in a small seasonal business and inventory optimization with stochastic demand. Section III: Optimization Models of Supply Chain Problems Chapter 10, “A Dynamic Programming Approach to the Stochastic Truckload Rout- ing Problem,” addresses a continuously changing and challenging problem faced by industry. In addition to traditional out-and-back routing, trucks are permit- ted to extend their routes until restrictions are reached.
This chapter develops and presents the results of applying a dynamic programming solution approach to solve Saunder August 25, 2010 13:43 AU945X˙C000 Introduction xiii an innovative triplet formulation to solve the stochastic truckload routing problem with time windows.