Hojung Shin

Manufacturing planning and control : The evolution of MRP and JIT integration

Abstract Material Requirements Planning (MRP) and Just-in-Time (JIT) system are directed toward planning and controlling the important characteristics of material flow: how much of what materials flow and when. Since the material flow is at the heart of the manufacturing firm, MRP and JHT are the powerful management tools that could determine the success or failure of an entire manufacturing system. One of the strongest debates in manufacturing has been centered on the performance comparison and compatibility of JIT production system to the existing MRP. The primary intent of this research is to provide an overview of the manufacturing planning and control environment associated with MRP and JIT. Classifying the existing MRP/JIT comparison and integration literature, two different perspectives on MRP/JIT are discussed, and future research area is proposed based on the taxonomy.

A quantity discount approach to supply chain coordination

Abstract Quantity discounts provide a practical foundation for inventory coordination in supply chains. However, typical supply chain participants may encounter difficulties in implementing the coordination policy simply because (1) specified lot size adjustments may deviate from the economic lot sizes and (2) the buying firm may face amplified overstocking risks related to increased order quantities. The main objective of this study is to develop a quantity discount model that resolves the practical challenges associated with implementing quantity discount policies for supply chain coordination between a supplier and a buyer. The proposed Buyer’s Risk Adjustment (B-RA) model allows the supplier to offer discounts that capitalize on the original economic lot sizes and share the buyer’s risk of temporary overstocking under uncertain demand. The analytical results suggest that the proposed B-RA discount approach is a feasible alternative for supply chain coordination under uncertain demand conditions.

A classification of the literature on the planning of substitutable products

A companys assortment of products and corresponding inventory levels are constrained by available resources, such as production capacity, storage space, and capital to acquire the inventory. Thus, customers may not always be able to find a most preferred product at the time of purchase; this unsatisfied demand is often substituted with an alternative. In the extant literature, there have been an increasing number of studies that consider product substitution when planning product assortment, inventory, and capacity, in conjunction with pricing. In this paper we classify the literature on the planning of substitutable products published in the major OM and marketing journals during the past thirty years (1974–2013) and present a comprehensive taxonomy of the literature. One criterion is adopted to discuss modeling objectives, and three major criteria are provided to define the nature of product substitution, including substitution mechanism, substitution decision maker, and direction of substitutability. We also identify research gaps to provide guidance for related research in the future.

Does Effective Inventory Management Improve Profitability?: Empirical Evidence from U.S. Manufacturing Industries

The present research investigates the effect of inventory performance on profitability. The objective is to find empirical evidence for the theory that operational excellence in inventory management improves profitability in the long run. To this end, the authors examine industry level longitudinal data 14 manufacturing industries at the SIC two-digit level over the 1958-1999 period by employing a series of hierarchical regression analyses. The statistical results confirm that a lower inventory level measured as the industry inventory-to-sales ratio has a positive effect on industry profitability measured as the profit-to-sales ratio. This evidence is found significant in 9 out of the 14 U.S. manufacturing industries. This study also reveals that not all the inventories, categorized by stage of fabrication, equally contribute to improving industry profitability. For instance, the profitability of the primary and fabricated metal industries has benefited from reductions in finished goods inventories, whereas that of the petroleum and coal products industry has been affected mainly by declines in work-in-process inventories.

Empirical Study on the Determinants of Service Quality Deterioration of Taxi Industry : Based on Traffic Accidents by Taxi in Seoul

Taxi, one of the passenger services, is an essential transporta tion system in our society. In spite of the importance of taxi service, deterioration of the service quality is continuously reported. In particular, taxi service failures due to traffic accidents have emerged as the most serious social probl em which may incur a considerable amount of social costs. In this study, we focus on analyzing the causes of servi ce quality deterioration- traffic accidents of both corpo-rately owned and privately owned taxies in Seoul. The research objective is to find out the determinants of service quality deterioration of Taxi industry and to suggest policies for improving the taxi service in Seoul. We collected the archival data from KTSA (Korea Transportation Safety Authority) and ODP (Open Data Portal), which span from 2005 to 2014. Hierarchical regression analyses and a set of mediatio n tests are conducted. The root factors inducing traffic accidents of taxies are divided into competitive, and profitabi lity factors. The statistical results indicate that the acci-dent ratio per taxi is not only affected by competitive/profita bility factors such as number of active taxi drivers, number of bus passengers, and taxi fare, but also mediated by the traf fic violation ratio. To alleviate the current problems with taxi service in Seoul, we conclude that the number of taxi es be reduced and the taxi fare be increased. Finally, we suggest several policies to improve the endemic taxi industr y problems, over-supply and the low profitability by enhancing the linkage between service quality and profitability.

On the Optimality of the Multi-Product EOQ Model with Pricing Consideration

Two previous studies that attempted to generalize the deterministic joint pricing-inventory decision model are reevaluated. We prove analytically that even in a single-product environment, the EOQ model with constant priceelastic demand cannot find optimal solutions unless two optimality conditions associated with price elasticity and demand magnitude are satisfied. Due to the inexistence of the general optimality for the problem, demand function and price elasticity must be evaluated and bounded properly to use the methods proposed in the previous studies.