Integrating the warehousing and transportation functions of the supply chain

Electronic commerce and associated business-to-business transaction capabilities have changed the way in which supply chains operate. The Internet has enabled information exchange on an unprecedented scale, often at a pace too fast for normal consumption. Companies are not equipped to make effective use of data from warehouse management systems––which contain information on supplier/customer warehouse inventory levels and key customer ordering patterns––and transportation management systems––within which information pertaining to the location of important supply chain assets such as products or vehicles is typically stored. These systems are key factors in integrating the physical flow of goods along the supply chain. The integration of these systems leads to global inventory visibility, which, in turn, leads to reduced costs and improved customer service by decreasing shipping and receiving cycle times, increasing shipment and inventory accuracy, and decreasing lead-time variability. This paper examines the total cost benefits that can be achieved by suppliers and warehouses through the increased global visibility provided by an integrated system. We develop a discrete event simulation model of a multi-product supply chain to examine the potential benefits to be gained from global inventory visibility and trailer yard dispatching and sequencing techniques. Experimental results demonstrate the potential for this integrated paradigm to improve customer service through improved efficiencies, reduced costs, and reduced lead-time variability.     

A generalized algebraic model for optimizing inventory decisions in a multi-stage complex supply chain

In this paper, we deal with more generalized inventory coordination mechanism in an n-stage, multi-customer, non-serial supply chain, where we extend and generalize pervious works that use algebraic methods to optimize this coordinated supply chain. We establish the recursive expressions for this multi-variable optimization problem. These expressions are used for the derivation of the optimal replenishment policy and the development of the solution algorithm. Further, we describe a simple procedure that can help in sharing the coordination cost benefits to induce all stages to adopt the inventory coordination mechanism. We provide a numerical example for illustrative purposes.     

基VMI的供应链利润模型研究

研究了供应链管理环境下新的库存策略。建立了基于VMI的有初始库存、允许库存短缺、缺货需补充、补充具有延时的供应链利润模型，并对该模型进行了供应链总的库存相关成本及供应商的库存相关成本分析。     

Optimizing inventory decisions in a multi-stage multi-customer supply chain

Most supply chain models focus on two-stage chains in which vendors supply material to one customer. In this paper, we formulate a three-stage supply chain model where a firm can supply many customers. We deal with three inventory coordination mechanisms between chain members and solve a cost minimization model for each. We show that some of the coordination mechanisms can result in a significantly lower total cost than matching production and delivery along the chain. We provide some insights into when the added complexity of the second and third coordination mechanisms lead to significant cost reductions.     

A technical note on “Optimizing inventory decisions in a multi-stage multi-customer supply chain”

We first generalize Khouja [Khouja, M., 2003. Optimizing inventory decisions in a multi-stage multi-customer supply chain. Transportation Research Part E: Logistics and Transportation Review 39 (3), 193–208] integrated model considering the integer multipliers mechanism and next individually derive the optimal solution to the three- and four-stage model using the perfect squares method, which is a simple algebraic approach so that ordinary readers unfamiliar with differential calculus can understand the optimal solution procedure with ease. We subsequently deduce the optimal expressions for Khouja (2003) and Cárdenas-Barrón [Cárdenas-Barrón, L.E., 2007. Optimal inventory decisions in a multi-stage multi-customer supply chain: a note. Transportation Research Part E: Logistics and Transportation Review 43 (5), 647–654] model, and identify the associated errors in Khouja (2003). We present two numerical examples for illustrative purposes. We finally shed light on some future research by extending or modifying the generalized model.     

An inventory-based simulation model for annual-to-daily temporal freight assignment

In the aggregate freight demand modeling literature, temporal assignment (annual to daily flows) is often oversimplified or neglected altogether. Unlike passenger flows, freight flows over the course of a year are not uniform and can vary significantly as the result of trade-offs between inventory and transportation cost management. We introduce the first temporal assignment model that explicitly considers these trade-offs for aggregate freight forecasting. A two-stage model is proposed that first decomposes aggregate annual zonal flows to firm group annual flows using a supply chain network model, which are then temporally assigned by simulating purchase order transactions throughout supply chains. Lot sizes are estimated with an Economic Order Quantity (EOQ) model and calibrated with monthly inventory data. The result is an aggregate-disaggregate-aggregate model that fits into aggregate freight forecasting models but makes use of more disaggregate logistical data. The model is illustrated with a simple replicable example, followed by a case study conducted with California statewide data to break out the distributed zonal flows into average daily volumes for network assignment. Calibration results using 2007 IMPLAN data showed a median percentage difference of simulated annual flows from FAF³ data of 2.38%, and a median percentage difference of simulated inventories from IMPLAN data of 4.85%, which suggests an excellent fit. Empirical validation results showed the model outperforms fixed factor approaches in mean value accuracy by 15–31%.     

Fault tolerance modeling for an e-waste recycling supply chain

This paper applies a fault-tolerant method that addresses the problem of steady fulfillment in an e-waste recycling supply chain. Due to the double-ended fluctuations in this supply chain, conventional, optimization based, model predictive control cannot be applied without proper improvement. This paper contributes to the e-waste management literature in the initiation of prudent demand management. The inventory management problem is investigated for a double-ended fluctuation for the e-waste recycling supply chain. It is found that the risk-sensitive predictive control method allows all members to retain a constant inventory level, for which the control target is unclear and the demand fluctuation is high.     

An integrated model for stock replenishment and shipment scheduling under common carrier dispatch costs

We examine a joint inventory replenishment and shipment scheduling problem that arises in the context of a vendor-managed inventory (VMI) arrangement. Since a temporal shipment consolidation policy is being implemented, the inventory requirements at the vendor are affected by the timing and quantity of shipment release. The vendor’s problem is to determine an integrated policy for inventory replenishment and shipment release and to set its parameters. We develop analytical models for computing such integrated policies where it is economical to use common carriage for outbound transportation. We propose algorithmic approaches to set the optimal policy parameter values.     

Dynamic impact on global supply chains performance of disruptions propagation produced by terrorist acts

Understanding disruptions and how their effects propagate through the supply chain is critical to promote security and efficient movement of goods. This research proposes a system dynamics model as an effective quantitative approach for analyzing the effects of the materialization and simultaneous propagation of disruptions produced by terrorist acts on global supply chains performance. The article shows that the impact on inventory levels in the supply chain can increase 600% compared to normal operating conditions as a result of increasing the security measures on international borders. Finally, useful conclusions for designing more resilient supply chains and future research are exposed.     

Optimizing shipment,ordering and pricing policies in a two-stage supply chain with price-sensitive demand

In this paper we focus on a two-stage supply chain consisting of one vendor and one buyer. We develop an integrated production–inventory–marketing model to determine the relevant profit-maximizing decision variable values. The model proposed is based on the joint total profit of both the vendor and the buyer, and it finds out the optimal ordering, shipment and pricing policies. We are able to ascertain the optimal decision variable values employing an analytical solution procedure. The numerical evidence suggests that it is more beneficial for the buyer and the vendor to cooperate with each other when the demand is more price sensitive.     

Designing a new supply chain for competition against an existing supply chain

We develop a bi-level model for designing an entrant supply chain (SC) in the presence of a pre-existing competing SC where demand is elastic with respect to price and distance. The model assumes dynamic competition between the new and pre-existing SCs in retailers’ level and probabilistic customers’ behavior. Strategic facility location and flow decisions are made while considering inventory carrying costs incurred on the operational level. We formulate the problem and propose exact and metaheuristic algorithms to solve it. The model is solved using data from a real-life case and also randomly generated test problems to extract managerial insights.     

The impacts of Radio Frequency Identification (RFID) technology on supply chain costs

Radio Frequency Identification (RFID) is regarded as a promising technology for the optimization of supply chain processes since it improves manufacturing and retail operations from forecasting demand to planning, managing inventory, and distribution. This study uses a simulation model to calculate the expected benefits of an integrated RFID system on a three-echelon supply chain obtained through performance increases in efficiency, accuracy, visibility, and security level. The study investigates how the product value, lead time, and demand uncertainty affect the performance of the integrated RFID supply chain in terms of cost factors at the echelon level.     

Modeling and optimizing transportation decisions in a manufacturing supply chain

We describe a transportation problem we studied at the trucking division of a textile manufacturer that owns and operates a large number of manufacturing facilities in all stages of the manufacturing supply chain. The problem involves scheduling of pickup and delivery of daily inventory movement between plants. We develop integer programming models that are based on the current workflow of the schedulers and that capture and optimize crucial aspects of the problem. We validate the models and demonstrate their use with actual data. The results suggest that an effective computerized decision-support system can be built around these models.     

The impact of transportation disruptions on supply chain performance

This paper investigates the effect of a transportation disruption on supply chain performance using system dynamics simulation, comparing a traditional supply chain and a vendor managed inventory system (VMI) when a transportation disruption occurs between 2 echelons in a 5-echelon supply chain. The greatest impact occurs when transportation is disrupted between the tier 1 supplier and warehouse. In the traditional structure the retailer, warehouse, and tier 1 supplier experience the greatest inventory fluctuations and the highest goods in transit to their facilities. These impacts are less severe for the VMI structure, although unfilled orders are approximately the same for each.     

A supply chain model of vendor managed inventory

This research evaluates how vendor managed inventory (VMI) affects a supply channel. Specifically, VMI always leads to a higher buyer's profit, but supplier's profit varies. In the short-term, VMI is found to reduce total costs of the channel system, but under certain cost conditions between buyer and supplier, it could decrease the purchasing price and supplier's profit. In the long-run, it could more likely increase supplier's profit than in the short-run. Finally, VMI is an effective supply chain strategy that can realize many of the benefits obtainable only in a fully integrated supply chain.     

Internet book retailing and supply chain management: an analytical study of inventory location speculation and postponement

Internet retailing models support supply chains where consumer order locations are decoupled from inventory locations. In this setting, retailers dynamically consider inventory location speculation and postponement to fulfill their orders. Particularly, retailers can manage inventory to fulfill orders through two opposing strategies: in-stock inventory and drop-shipping. This paper extends the supply chain management literature by modeling Internet retailers' decisions to balance their offerings between these two strategies. The results show how retailers depend more on both of these strategies as their market share and product popularity increase. Thus, both inventory management strategies may be considered simultaneously to better manage Internet retailers' inventory.     

Defining a conceptual model for high-speed vessels

High-speed vessels offer the opportunity for faster and more frequent delivery of smaller quantities of goods over shorter sea crossings. This paper reviews the role of high-speed vessels in the context of the total supply chain based on Fisher's product categorisation model. A mode choice process is presented here within the context of supply chain transport strategies. The model relates mode choice to volume supply, product cost, shipping distance, frequency of service, transit time and product type. The paper concludes that where the flexibility is the market winner high-speed vessels are required whereas where cost is the market winner conventional ships will suffice.     

面向电子供应链的企业物流信息系统模型研究

面向电子供应链的企业物流信息系统的开发和建设,有助于实现企业、供应商、销售商之间的协调发展,减少库存,降低操作成本,缩短交易时间等。根据电子供应链的网络环境特点,在研究制造业企业物流一般流程的基础上,根据主、辅制造商物流流程,提出企业物流信息系统的参考模型结构设计。     

Dual sourced supply chains: the discount supplier option

In this paper, we examine the dynamics of a supply chain that has the option of using two suppliers – one reliable, and the other unreliable. We characterize the unreliable supplier with long lead-time mean and variance. Although the use of the unreliable supplier might potentially warrant higher inventory and transportation costs, it is attractive because of the willingness of the supplier to provide a discount on the purchase price. We analyze the cost economics of two suppliers in a broader inventory-logistics framework, one that includes in-transit inventories and transportation costs. In this broader perspective, we provide a simple heuristic and sample exchange curves to determine: (i) if the order should be split between the suppliers; and (ii) if the order is split, the amount of discount and the fraction ordered to the secondary supplier to make order-splitting a worth-while policy. ©     

Incorporating location,routing and inventory decisions in supply chain network design

This paper for the first time presents a novel model to simultaneously optimize location, allocation, capacity, inventory, and routing decisions in a stochastic supply chain system. Each customer’s demand is uncertain and follows a normal distribution, and each distribution center maintains a certain amount of safety stock. To solve the model, first we present an exact solution method by casting the problem as a mixed integer convex program, and then we establish a heuristic method based on a hybridization of Tabu Search and Simulated Annealing. The results show that the proposed heuristic is considerably efficient and effective for a broad range of problem sizes.