Huynh Trung Luong

Measure of bullwhip effect in supply chains with autoregressive demand process

Abstract In supply chain management, one of the most critical problems which require a lot of effort to deal with is how to quantify and alleviate the impact of bullwhip effect – the phenomenon in which information on demand is distorted while moving upstream. Although it is well established that demand forecast, lead time, order batching, shortage gaming and price fluctuation are the main sources that lead to the bullwhip effect, the problem of quantifying bullwhip effect still remain unsolved in many situations due to the complex nature of the problem. In this research, a measure of bullwhip effect will be developed for a simple two-stage supply chain that includes only one retailer and one supplier in the environment where the retailer employs base stock policy for their inventory and demand forecast is performed through the first-order autoregressive model, AR(1). The effect of autoregressive coefficient and lead time on this measure will then be investigated.

Determining optimal order splitting and reorder level for N-supplier inventory systems

This paper considers multiple-supplier single-item inventory systems, where the item acquisition lead times of suppliers and demand arrival are random, and backorder is allowed. The acquisition takes place when the inventory level depletes to a reorder level, and the order is split among multiple suppliers. The acquisition lead times may have different distributions, the unit purchasing prices from suppliers may be different, and thus the order quantities for different suppliers may be different. The problem is to determine the reorder level and order quantity for each supplier so that the expected total cost per unit time, consisting of the fixed ordering cost, procurement cost, inventory holding cost and shortage cost, is minimized. We develop a mathematical model describing the system in detail. We also conduct extensive numerical experiments to analyze the advantages and distinct characteristics of multiple-supplier systems.

Measure of bullwhip effect in supply chains: The case of high order autoregressive demand process

Abstract Bullwhip effect – the phenomenon in which variance of demand is amplified when moving upstream – has attracted the attention of many researchers for the last few decades. Although the main sources that cause bullwhip effect have been identified, quantifying the bullwhip effect still remains a challenge. In the past, measuring the bullwhip effect for supply chains with autoregressive demand process has been conducted by some researchers. However, most past researches focused mainly on the simple AR(1) model. In many practical situations, autoregressive models with higher order should be employed because they might better represent the demand process. Up to now, very little effort has been spent on this matter. Therefore, this research is conducted to fill this gap by first dealing with AR(2) demand process and investigating the behavior of the developed measure with respect to autoregressive coefficients and order lead-time. Extension to the general AR( p ) demand process is then considered.

Fund allocation model for pipe repair maintenance in water distribution networks

Abstract Funds for repair maintenance operations of municipal water distribution networks are normally allocated to each predefined pipe section of the network. During the planning time period whenever pipe leaks are detected in a section, repair actions are undertaken until the funds assigned to the section are exhausted. In practice, funds are usually allocated to each pipe section based on the expected number of leak occurrences, leak size and leak duration or the expected leak volume. The allocation of limited repair funds to different pipe sections is however, frequently done without accurate quantitative analysis that carefully considers random events. In this paper, a mathematical model that considers explicitly the randomness of the time interval between leak occurrences and leak durations is developed and proposed for city authorities to ascertain the assignment of optimal funds for pipe repair maintenance operations. The objective of the proposed model is to maximize the net benefit, defined as the benefit gained from water saving due to repair fund allocation minus the allocated repair funds. The model is extended to determine the optimal allocation of the limited repair funds to different sections of the network, by applying a Lagrangian relaxation method to find an optimal solution.

Optimal replacement policy for single pipes in water distribution networks

In the actual operation of a distribution network, failure can occur in any component of the network, such as pumps, valves, junctions, and pipes. When a component is experiencing failure, the question raised is whether to replace or repair it. For the case of a pipe in the distribution network, which is one of the most frequently subject-to-failure components, there are some aspects that still remain unresolved in relation to practical operations of a maintenance program. In this research paper, a mathematical model is developed which aims to support a decision to repair or replace a main pipe in the state of failure. The objective of the model is to maximize the long-run availability of the pipe under some budget constraints. A semi-Markov process is used to depict the behavior of the pipe, and replacement ages of the pipe in each of its deteriorating stages are taken as the decision variables. The original nonlinear problem resulting from model formulation is converted to a linear problem by some simple transformations, and then numerical experiments are conducted to illustrate the applicability of the proposed model.

Selection and evaluation of third party logistics service provider (3PLSP) by using an interpretive ranking process (IRP)

Purpose The concept of third-party logistics service provider (3PLSP) has been considered as an essential organizational philosophy to achieve profits. The purpose of this paper is to analyze and examine the contextual relationship among the critical success factors (CSF) of 3PLSPs practices in the cement manufacturing industry. Design/methodology/approach In this paper, the total 20 critical selection criteria with nine processes for the 3PLSPs, of an Indian cement manufacturing industry have been identified through an exhaustive literature review and opinions of the experts i.e. academics and industries. Interpretive ranking process (IRP) methodology has been presented to find out the rankings of the individual criteria and the mutual influence in the selection process. Findings The proposed model establishes the dominance of relationship among identified criteria, which plays a vital role in the 3PLSPs selection process which are experience in similar product, quality of management, information technology capacity, flexibility in operation and delivery, compatibility with the users. Research limitations/implications An empirical research approach has not been used to collect primary data to rank different criteria for effective 3PLSPs implementation in the Industry. In this paper, an example of Indian cement industry is presented to show the real world applicability of the proposed model. Originality/value This model would help a decision maker to decide the issues related to a selection of 3PLSPs. The third party service provider comprises the use of external companies who controls and delivers logistic activities. The paper discusses very practical issues in an analytical manner, using the case base method.

Optimal fund assignment and allocation models for pipe repair maintenance in leaky water distribution networks

In pipe repair maintenance operations for leaky water distribution networks in cities, it is usually the practice that whenever pipe leaks are detected, repair actions are undertaken until the funds assigned are exhausted. The allocation of limited repair funds to different pipe sections is normally done without careful quantitative analysis but according to an intuitive rule, whereby the section of the larger leak volume receives the larger share of funds. This paper proposes a new modeling approach to determine optimal repair fund allocation to different sections of a city. A basic periodic-review stochastic demand inventory model is first applied to ascertain the optimal funds to be assigned to a city under an assumption of no fund limitation. The model is then extended to determine the optimal allocation of the limited funds to different sections of a city. The models minimize the expected total system cost composed of repair cost, storage cost (of spare parts and materials), and penalty cost for water loss due to lack of funds. Numerical experiments are then conducted to illustrate the applicability of the proposed models, and the characteristics of the optimal solutions with regard to parameter variations are investigated. Data used in the numerical example are taken from actual data of the secondary network of Ho Chi Minh City in Vietnam.

Integrated Location-Production-Distribution Planning in a Multiproducts Supply Chain Network Design Model

This paper proposes integrated location, production, and distribution planning for the supply chain network design which focuses on selecting the appropriate locations to build a new plant and distribution center while deciding the production and distribution of the product. We examine a multiechelon supply chain that includes suppliers, plants, and distribution centers and develop a mathematical model that aims at minimizing the total cost of the supply chain. In particular, the mathematical model considers the decision of how many plants and distribution centers to open and where to open them, as well as the allocation in each echelon. The LINGO software is used to solve the model for some problem cases. The study conducts various numerical experiments to illustrate the applicability of the developed model. Results show that, in small and medium size of problem, the optimal solution can be found using this solver. Sensitivity analysis is also conducted and shows that customer demand parameter has the greatest impact on the optimal solution.

An ISM approach for the barrier analysis in implementing sustainable practices: The Indian oil and gas sector

Purpose The purpose of this paper is to identify and model critical barriers to sustainable practices implementation in Indian oil and gas sectors by the interpretive structural modeling (ISM) approach. Design/methodology/approach In this paper, through exhaustive literature survey and experts opinions, 14 critical barriers were identified, and the ISM tool, which is a multi-criteria decision-making approach, was used to establish interrelationship among the identified barriers and to determine the key barriers having high driving power. Findings After analyzing, it was found that six barriers, namely, market competition and uncertainty (B7), shortage of resources (B8), governmental rules and regulations (B1), knowledge and training (B2), financial implications (B3), and management commitment and leadership (B5) were found to have high influencing power. These barriers need the maximum attention and organizations need to overcome these hindrances for the effective implementation of sustainable practices. From the driving and dependence power diagram, two barriers, namely, management commitment and leadership (B5) and knowledge and training (B2) were found to have the highest driving power and two barriers, namely, lack of green initiatives (B9) and lack of corporate social responsibility (B14) were found to have highest dependence power. Research limitations/implications The presently developed model is based on the experts’ opinions, which may be biased, influencing the final output of the structural model. The research implications of the developed model are to help managers of the organization in understanding significance of the barriers, to prioritize or eliminate the same for the practical implementation of sustainability. Originality/value This is for the first time an attempt has been made to apply the ISM methodology to explore the interdependencies among the critical barriers for Indian oil and gas industries. This paper will guide the managers at various levels of an organization for effective implementation of the sustainable practices.

Modelling a two-retailer inventory system with preventive lateral transshipment using expected path approach

The paper presents the formulation of a mathematical model using the expected path approach in order to minimise the expected long-run total system cost per cycle of a two-retailer inventory system with preventive lateral transshipment. Each retailer employs base stock periodic review policy. The model assumes Poisson distributed demand and instantaneous transshipment. Unsatisfied demands are fully backlogged. Transshipment quantity is controlled by the hold-back inventory level. The benefits of inventory redistribution are illustrated by percentage reduction of system cost. The results show that cost parameters play a substantial role in transshipment decision. The benefits of lateral transshipment increase with either four conditions; unit transshipment cost is lower, unit backorder cost per unit time is higher, the transshipment point is scheduled near the end of the cycle, and regular replenishment lead time is longer. Furthermore, the decrease in system cost mainly comes from the reduction of the expected holding inventory cost. [Received 6 March 2010; Revised 28 February 2011, 4 August 2011, 15 September 2011, 28 September 2011; Accepted 28 September 2011].