George C. Hadjinicola

A heuristic procedure for the single-row facility layout problem

The single-row facility layout problem arises when assigning service rooms along a corridor, storing files on the cylinders of a disk, and in flexible manufacturing systems where the efficiency of automated guided vehicles forces the layout to be linear. This paper describes a constructive heuristic which provides solutions to the single-row facility layout problem so as to minimize the materials handling cost. The heuristic assigns the facilities with the largest number of moves between them to adjacent locations on the line. The heuristic differs from earlier algorithms since at any stage of the process, more than two facilities can be added to the solution sequence. The performance of the heuristic is compared to other methods proposed for the single-row facility layout problem. Results show that the heuristic performs well in terms of computational efficiency and solution quality.

Assessing production and operations management related journals: the European perspective

Abstract Following the evolution and growth of the field of production and operations management (POM), a number of studies have recently appeared which provide insights on the ranking of the research outlets of the field. These studies are US-based and exclude non-US researchers. In this study we present rankings of the publication outlets in the POM discipline as perceived by POM researchers in Europe. Perceived relevance and quality of POM related journals, and differences between the rankings obtained by our study and those obtained by existing studies are identified. An examination of the publication rate of European researchers in five highly ranked journals provides further insights and future research directions.

The overbooking problem in hotels with multiple tour‐operators

Examines the practice of overbooking at hotel and tour operator levels. By accepting more reservations than their available capacity, hotels hedge against the problem of cancellations. Hotels located in popular tourist resorts, allocate their capacity to multiple tour‐operators who through the vacation packages they offer, fill the hotels’ capacity. Shows that for this type of hotel, an overbooking policy applied at the hotel level and derived using the capacity of the hotel as a whole, gives better cost savings than when formulating an overbooking policy for each tour‐operator separately. The result of the analysis provides significant managerial implications since a hotel dealing with multiple tour‐operators, in devising its overbooking policy needs only to consider the occupancy of the hotel as a whole and not the performance of each tour‐operator. This simplicity is further reflected in the reduction of information required to be recorded.

Modeling manufacturing and marketing options in international operations

Abstract In this paper, we model and compare eight manufacturing–marketing options that a firm with operations in two countries (termed as an international enterprise) may adopt. Manufacturing factors incorporated in the model include factory location, inventory, economies of scale, product design, and postponement. Marketing factors include product positioning and pricing. The model also includes international factors such as the exchange rate and transportation cost. The first two options are termed core product options where the international enterprise manufactures a “core product”, in a single facility located in one of the countries. Under the first core product option, this facility also performs additional operations on the core product to develop custom-tailored products. Under the second core product option, customization of the core product takes place in facilities located in both countries. The other six options are characterized by standardization/customization of product and pricing policies as well as centralization/decentralization of the production function. The main result of the analysis is that under certain production-related conditions, the core product options dominate the other six manufacturing–marketing options. This result has significant managerial implications since it suggests that the core product options exploit the best of both worlds, customized pricing and product policies as well as savings derived from economies of scale from the centralized production of the core product.

Marketing–production coordination in channels of distribution

Abstract In this paper, we analyze the effects of functional (horizontal) decentralization by a channel member on the performance of an industrial channel of distribution. We use the model of (Eliashberg, J., Steinberg, R., 1987. Management Science 33, 981–1000), which describes a channel of distribution consisting of a manufacturer and a value-adding distributor. We allow the distributor to decentralize decision-making between his marketing and production functions. Our results show that functional decentralization at the distributor level increases the price sensitivity of the distributor concerning the price he faces from the manufacturer, causes a shift in the distributors demand curve, increases the distributors inventory activities, in terms of both quantity and time frame, and under certain conditions, increases the manufacturers inventory. As expected, the decentralized distributor has a less-coordinated pricing policy vis-a-vis the production policy. Using numerical means, we show that functional decentralization can improve the overall channel profitability, i.e., for both manufacturer and distributor. This counter-intuitive result suggests that in our non-repeated perfect information game setting, functional decentralization can yield a Pareto-dominant equilibrium outcome where both the distributor and manufacturer are better off, even though it is only the distributor who is changing his organizational decision-making.

Cellular Manufacturing at Champion Irrigation Products

Champion Irrigation Products is a company which has started to employ the principles of Cellular Manufacturing in its operations. Undertakes the task of examining the applicability of Cellular Manufacturing at the company by using several methods for cell formation. Describes the design and implementation phase of the application, along with the obstacles encountered and solutions provided. Benefits realized from the application of Cellular Manufacturing at Champion Irrigation Products include reduction in work‐in‐process inventory and materials movement, increase in quality, and simplification of production, planning and control procedures. The success of the application lies in the fact that management at Champion Irrigation Products did not view Cellular Manufacturing as a mere rearrangement of the factory floor, but as a starting‐point for the continuous questioning of its practices, with the goal of improving the manufacturing function.

Factors affecting research productivity of production and operations management groups: An empirical study

This paper identifies factors that promote research productivity of production and operations management (POM) groups of researchers in US business schools. In this study, research productivity of a POM group is defined as the number of articles published per POM professor in a specific period of time. The paper also examines factors that affect research quality, as measured by the number of articles published per POM professor in journals, which have been recognized in the POM literature as an elite set. The results show that three factors increase both the research productivity and the quality of the articles published by professors of a POM group. These factors are (a) the presence of a POM research center, (b) funding received from external sources for research purposes, and (c) better library facilities. Doctoral students do assist in improving research quality and productivity, but they are not the driving force. These results have important implications for establishing policy guidelines for business schools. For example, real-world problems are funded by external sources and have a higher probability of publication. Furthermore, schools could place more emphasis on external funding, as most engineering schools do, since groups receiving external funding are more productive in terms of research.

Reducing the cost of defects in multistage production systems: A budget allocation perspective

Abstract Manufacturing firms are frequently concerned with operational improvements of their production system. As such, firms are often called to address the following question: How should they allocate their limited capital resources to the various stages of a multistage production system in order to improve the yield of the production stages and, at the same time, minimize the annual cost incurred from defects? In this paper, we provide a mathematical foundation for managerial decision making, which addresses this important operational problem. The approach we present is generalizable to any multistage production system, including existing and start-up systems, and considers the interplay of four factors on the allocation of capital resources. For each stage, these factors include the current mean yield, the cost of achieving the yield improvement, the cost incurred to the firm from a defect observed at each production stage, and the annual number of products processed. The formulation results in a budget allocation tool that allows managers to consider tradeoffs on the aforementioned factors across all stages. A sensitivity analysis identifies cases where a particular production stage is more likely to have a higher yield improvement compared to other stages. The sensitivity analysis is particularly useful for decision making in cases where the model parameters can not be accurately estimated, and management can only provide an estimate of a range of possible values. We demonstrate the applicability of the budget allocation approach using data from a real life multistage production system.

Resource allocation to defensive marketing and manufacturing strategies

Abstract In this paper, we investigate the coordinated use of marketing and manufacturing strategies to formulate a defensive business strategy for an incumbent firm upon market entry. While defensive marketing strategies have been researched extensively, little has been done on defensive manufacturing strategies and even less on coordinating these two. We propose a formulation for the joint formation of a defensive strategy by the marketing and production functions under budget constraint considerations. The incumbent firm may allocate its resourcesto advertising and distribution expenditures, as well as to manufacturing investments to reduce the unit production cost. The incumbent firm has also the option of simply allocating all of its resources purely to advertising and distribution. We show that while there exist cases where the optimal reaction to entry involves investments in manufacturing improvements, there are also cases where defense is in marketing strategies alone. We identify the market conditions that promote such reactions to entry and also provide sensitivity analysis.

Product Positioning Using a Self-Organizing Map and the Rings of Influence†

In this article, we propose a new product positioning method based on the neural network methodology of a self-organizing map. The method incorporates the concept of rings of influence, where a firm evaluates individual consumers and decides on the intensity to pursue a consumer, based on the probability that this consumer will purchase a competing product. The method has several advantages over earlier work. First, no limitations are imposed on the number of competing products and second, the method can position multiple products in multiple market segments. Using simulations, we compare the new product positioning method with a quasi-Newton method and find that the new method always approaches the best solution obtained by the quasi-Newton method. The quasi-Newton method, however, is dependent on the initial positions of the new products, with the majority of cases ending in a local optimum. Furthermore, the computational time required by the quasi-Newton method increases exponentially, while the time required by the new method is small and remains almost unchanged, when the number of new products positioned increases. We also compute the expected utility that a firm will provide consumers by offering its products. We show that as the intensity with which a firm pursues consumers increases, the new method results in near-optimal solutions in terms of market share, but with higher expected utility provided to consumers when compared to that obtained by a quasi-Newton method. Thus, the new method can serve as a managerial decision-making tool to compare the short-term market share objective with the long-term expected utility that a firm will provide to consumers, when it positions its products and intensifies its effort to attract consumers away from competition.