An inventory reservation problem with nesting and fill rate-based performance measures

In many inventory settings companies wish to provide customer-differentiated service levels. These may, for example, be motivated by differences in the perceived customer lifetime value or by specific contractual agreements. One approach to provide differentiated service levels is to reserve some portion of the available inventory exclusively for specific customer classes. Existing approaches to inventory reservation are typically based on the assumption that a company can assign a customer specific revenue or penalty cost to any order or unit of demand filled or unfulfilled. In practice, however, it is usually extremely difficult to accurately estimate (especially long term) monetary implications of meeting or not meeting customer demand and corresponding service level requirements. The research presented in this paper addresses the problem of setting appropriate inventory reservations for different customer classes based on fill rate-based performance measures. We model a single period inventory reservation problem with two customer classes and nesting. We develop exact expressions for two conflicting performance measures: (1) the expected fill rate of high priority customers and (2) the expected loss in the system fill rate induced by inventory reservation. With these expressions a decision maker can analyze the tradeoff between the loss in overall system performance and the higher expected fill rates for prioritized customers. We provide analytical insights into the effects of nesting and the impact of relevant problem parameters on these two performance measures. The analytical insights are illustrated and highlighted through a set of numerical examples. Although we limit our analysis to a single period inventory reservation problem, we expect that our results can be utilized in a wide range of problem settings in which a decision maker has to ration a perishable resource among different classes of customers.     

Capacity flexibility allocation in an outsourced supply chain with reservation

We consider a contract manufacturer that serves a limited number of outsourcers (customers) on a single capacitated production line. The outsourcers have different levels of demand uncertainty and the contract manufacturer faces the question how to allocate the contractual capacity flexibility in an optimal way. The contractual capacity flexibility is a contract parameter that sets the amount of demand the contract manufacturer is obliged to accept from the outsourcers. We develop a hierarchical model that consists of two decision levels. At the tactical level, the contract manufacturer allocates the capacity flexibility to the different outsourcers by maximizing the expected profit. Offering more flexibility to the more uncertain outsourcer generates higher expected revenue, but also increases the expected penalty costs. The allocated capacity flexibilities (determined at the tactical level) are input parameters to the lower decision level, where the operational planning decisions are made and actual demands are observed. We perform a numerical study by solving the two-level hierarchical planning problem iteratively. We first solve the higher level problem, which has been formulated as an integer program, and then perform a simulation study, where we solve a mathematical programming model in a rolling horizon setting to measure the operational performance of the system. The simulation results reveal that when the acceptance decision is made (given the allocated capacity flexibility decision), priority is given to the less uncertain outsourcer, whereas when the orders are placed, priority is given to the most uncertain outsourcer. Our insights are helpful for contract manufacturers when having contract negotiations with the outsourcers. Moreover, we show that hierarchical integration and anticipation are required, especially for cases with high penalty cost and tight capacities.     

Short-term decision support system for maintenance task prioritization

Maintenance operations have a direct influence on production performance in manufacturing systems. Short-term production analysis is imperative to enable manufacturing operations to optimally respond to dynamic changes in the system behavior. However, most of the conventional decision support systems for production and maintenance focus on long-term statistic analysis, which is usually not applicable to a short-term period. Maintenance task prioritization is crucial and important for short-term analysis to reduce unnecessary or improper maintenance activities, especially when availability of maintenance resources is limited. The existing methods for maintenance priority assignment are often through heuristic methods or experience, which could cause unscheduled downtime and production losses. In this paper, a short-term decision support system for maintenance task prioritization based on the system operating conditions is introduced. The impact factor for priority assignment is obtained theoretically. A case study based on the simulation of an automotive assembly line illustrates that the proposed short-term system improves the system performance with a lower cost than the long-term method.     

Usage sensitivity and priority coding: a flexible approach to telecommunications pricing

This article proposes a priority coding system to decrease peak telephone demand and decrease costs to the telephone company. The system has been used for computer time and decreases the cost of servicing off-peak users as well as decreasing the price to such users.     

Pioneering advantages in manufacturing and service industries: empirical evidence from nine countries

Although one might expect differences between manufacturing and service firms in pioneering advantages, the extent of these differences has not yet been investigated. This is the first cross‐national study that compares such differences in nine countries/regions: the United States, the United Kingdom, Germany, Japan, China, Taiwan, Hong Kong, South Korea, and Singapore. We develop several hypotheses concerning the perceptions of managers of manufacturing firms and service firms regarding the benefits and post‐entry risks of pioneering, and the cost and differentiation advantages accruing to the pioneering firm. We test the hypotheses with data from 2,419 firms representing all nine countries and both industrial sectors. We find that: (1) managers from all countries perceive pioneering to be associated with higher market share and/or profitability; (2) manufacturing firm managers perceive pioneering risks to be significantly more important than do service firm managers; (3) cost and differentiation advantages of pioneering are, for the most part, more significant to manufacturing than to service firm managers; (4) Western manufacturing firm managers perceive the cost advantages to be more important than Asian Pacific manufacturing firm managers. We conclude by presenting the managerial implications of our findings. Copyright © 1999 John Wiley & Sons, Ltd.     

Prioritizing Project Selection

We consider capital investments under uncertainty. A typical approach to this problem, when the problem parameters are assumed known, is via a multi-knapsack model. This model takes as input annual budgets as well as the cost streams and profit—i.e., net present value (NPV)—of each project. Its output is a portfolio of projects with the highest total NPV, observing yearly budget constraints. We argue that such a portfolio fails to hedge against uncertainties in the budgets, the cost streams, and the profits. As an alternative, we propose a model that forms an optimal priority list of projects, incorporating multiple scenarios for these input parameters. We apply our approach to two sets of example projects from the South Texas Project Nuclear Operating Company.     

经济中介的代理成本与我国经济中介业的发展

作为一种经济组织，经济中介机构在降低市场经济活动交易成本的同时也会产生代理成本。我国经济中介业发展历史短，存在无序竞争和规范化程度低等问题，由此产生的代理成本严重影响了对经济中介服务的市场需求，制约了经济中介业的发展。本文从分析经济中介组织的代理成本入手，指出推动经济中介业快速必须通过准入标准、建立信用评价体系和加大惩罚力度，从而有效降低经济中介的代理成本。     

Cost allocation and regulatory pricing in telecommunications : A UK case study

This article describes the application of alternative cost allocation methodologies to the Hull telephone system, which provides service to a small area of the UK independently of British Telecom. The article first discusses alternative uses of and methods for allocating costs among access, local usage and trunk usage. It then implements the fully distributed cost approach, using accountancy data provided by the company. In addition, several illustrative calculations are shown which cost individual services on a stand-alone basis using different technologies. The results broadly suggest that, on a full distributed cost basis, access costs exceed existing average tariff levels. The article concludes with some illustrative calculations showing the rebalancing of access and usage charges which would generate the same revenue but bring them more in line with costs.     

The performance of two popular service measures on management effectiveness in inventory control

Service is one of the inventory managers' concerns and is frequently incorporated into the ordering decisions. Since there are multiple measures of service available for evaluating the efficiency of an inventory system, a comparative study is necessary and has not been addressed in the literature. This paper evaluates two popular service measures, which are the probability of no stockout during lead time and the fill rate, in the context of continuous inventory systems. The performance of the two measures is examined by evaluating the tradeoff among the cost, the level of service, and the inventory turnover ratio.     

Service Regulations,Input Prices and Export Volumes: Evidence from a Panel of Manufacturing Firms

Using a panel of firm‐level data from Spanish manufacturers, this study shows that better service regulation reduces the price of intermediate inputs paid by downstream firms. The beneficial cost effects of services reforms extend to both large and small‐to‐medium sized corporations (SME’s), but the former tend to enjoy greater gains. This feature also manifests itself in international markets. We find evidence of an input cost channel through which service regulations affect the volume of exports of large manufacturers, while the evidence of such a channel is weaker for SME’s. Our estimates indicate that, from 1991 to 2007, large firms increased their volume of exports by an average of 20 per cent as a result of the direct input cost effect of services reforms, such that the firms that benefited the most typically belonged to industries more dependent on service inputs. Furthermore, convergence to the ‘best practice’ regulatory framework in services would have raised exports at least by an additional nine per cent. We conclude that firm size is relevant for the connection between services reforms, intermediate input prices and export volumes.     

财政外溢下的地方政府公共服务提供——以教育为例

主流财政分权和公共服务提供理论在强调地方政府竞争效率的同时,较少考虑联邦体制与单一集权体制的制度差异,而且忽视了地方政府在提供一些公共服务时面临着巨大的财政外溢。考虑到我国单一集权的政体背景,应用多任务代理框架来构建理论模型,可以发现。地方政府会忽视产出不易测量的文教卫生等社会民生类公共服务的提供。在人口大规模迁移使得教育支出具有显著财政外溢情况下,地方政府将进一步削减教育支出,并向居民转嫁。未来的政策调整方向是,淡化地方政府经济活动激励的同时,加大对社会民生类公共服务的激励强度,并增加对具有财政外溢的教育的专项转移支付,使其经费负担主体逐步上移。     

Identifying service strategies in product manufacturing companies by exploring environment-strategy configurations

Higher market complexity and increasing competitive intensity are forcing traditional product-manufacturing companies to change their position in the goods-services continuum by continuously extending the service business. However, the existing literature tends to be somewhat vague in defining service strategies for manufacturing companies wishing to move along the continuum. The purpose of this study is to identify service strategies that correspond with specific environment-strategy fits. Using an exploratory factor and cluster analysis for testing Western European firms, the study highlights four different service strategies. The four service strategies include after-sales service providers (ASPs), customer support providers (CSPs), outsourcing partners (OPs), and development partners (DPs). After-sales service providers concentrate on cost leadership and ensure proper functioning of the product. Customer support providers form a unique value proposition by investing in a strong product and service differentiation. Outsourcing partners combine cost leadership with service and product differentiation to offer attractive prices for operational services. Their goal is to assume the operating risk and full responsibility for the customer's operating processes. Development partners provide research and development services to create a situation in which customers benefit directly from their development competencies.     

Sourcing practices and boundaries of the firm in the financial services industry

We investigate sourcing decisions related to the back‐office operations of 108 processes used by financial services companies. Guided by the arguments of transaction cost economics and the resource‐based and knowledge‐based view of organizations, we hypothesize that service customization and volume represent two key drivers of a service company's sourcing decisions. The inherent uncertainty of service customization gives rise to the transaction cost risks of opportunism and holdups and thus favors insourcing. Moreover, the competency gained from performing high‐volume back‐office operations aligns with the tenets of the resource‐based view, which also favors insourcing. The empirical results corroborate these theoretical expectations. Copyright © 2007 John Wiley & Sons, Ltd.     

A Review of: INVENTION AND ECONOMIC GROWTH by Jacob Schmookler Harvard University Press 1966 332 pp. $9.95

This paper presents a procedure for calculating system and component utilization patterns or load curves which describe the use of a single service facility by several independent agencies. Such load curves are frequently used to allocate cost of the facility among the agencies it serves. The procedure is a computer model that establishes a link between data that are readily obtain ed and data that are required by allocation formulas. The model derives detailed load curves for each agency and for the-total system. A Monte Carlo procedure is suggested in which the model may be used to estimate the sensitivity of allocation formulas to error in the underlying data.     

一种基于高动态无人机群的TDMA时隙调度策略

为了满足高动态无人机群自组网在网络拓扑频繁变化下快速传输高优先级业务的需求,提出一种基于TDMA协议的动态优先级时隙分配算法。根据节点优先级级别,在TDMA协议框架下提出面向不同业务需求的动态时隙分配算法,采用位向量（BOV）间接确认法实现节点时隙分配;并通过多维度调整策略,综合业务优先级、邻居节点数量、邻居节点变化率和等待时间多个维度确定节点优先级,均衡不同优先级节点对不同数量时隙的申请;最后通过仿真实验对调度策略进行了验证。结果表明,提出的动态优先级时隙分配算法（DP-TDMA）在拓扑频繁变化时可以动态申请、快速分配不同数量的业务时隙,满足对多种业务传输需求;在一定程度上降低了高动态下网络拓扑变化的影响,提高了协议的公平性与稳定性,保证了高优先级信息快速传输,提高了网络的吞吐量。所设计的DP-TDMA算法可应用在高动态无人机群自组网场景中,为网络时隙资源分配提供参考。     

Internet Car Retailing

We investigate the effect of Internet car referral services on dealer pricing of automobiles in California. Customers of an online service pay on average 2% less for their car ($450 for the average car). 25% of the savings come from purchasing at low-price dealerships affiliated with the online service. The remaining 75% stem from information provision by the online service, bargaining by the service on behalf of consumers, and cost efficiencies. A consumer receiving the mean online price does better than 65% of offline consumers, conditional on the car being purchased.     

Net neutrality and innovation at the core and at the edge

How would abandoning Internet net neutrality affect content providers that have different sizes? We model an Internet broadband provider that can offer a different quality of service (priority) to heterogeneous content providers. Internet users can potentially access all content, although they browse and click ads with different probabilities. Net neutrality regulation effectively protects innovation done at the edge by small content providers. Prioritization, instead, increases both infrastructure core investment and welfare only if it sufficiently stimulates innovation from the large content provider.     

THE EFFECT OF TECHNOLOGICAL IMPROVEMENT ON CAPACITY EXPANSION FOR UNCERTAIN EXPONENTIAL DEMAND WITH LEAD TIMES

We formulate a model of capacity expansion that is relevant to a service provider for whom the cost of capacity shortages would be considerable but difficult to quantify exactly. Due to demand uncertainty and a lead time for adding capacity, not all shortages are avoidable. In addition, technological innovations will reduce the cost of adding capacity but may not be completely predictable. Analytical expressions for the infinite horizon expansion cost and shortages are optimized numerically. Sensitivity analyses allow us to determine the impact of technological change on the optimal timing and sizes of capacity expansions to account for economies of scale, the time value of money and penalties for insufficient capacity.     

Managing an in-house R&D service department

The paper reports a study carried out in a large UK industrial R&D establishment which had recognised that queuing for service from support groups was becoming a serious problem.
The main part of the study was carried out on the operations of an analytical department. Interviews were carried out with both 'servers' and 'customers' at all levels in the organisation. These were supplemented by observations of the actual process by which service was demanded and rendered, and by analysis of records.
The study revealed why the queuing problem arose and the reasons for its undesirable effects. The authors concluded that resolution of the problems is a matter for the organization as a whole, and not merely for servers and customers.
The situation is further analysed in terms of queuing theory. It is argued that improvement could be achieved if a systematic priority allocation system which took into account both urgency and importance were instituted. However, rational scheduling is possible only over a short time horizon, given current human and computing abilities. To achieve optimization over a longer time horizon the authors recommend the development of an expert system incorporating past experience into its knowledge base.