Kh Karel van Donselaar

A heuristic to manage perishable inventory with batch ordering, positive lead-times, and time-varying demand

So far the literature on inventory control for perishable products has mainly focused on (near-) optimal replenishment policies for a stylized environment, assuming no lead-time, no lot-sizing, stationary demand, a first in first out withdrawal policy and/or product life time equal to two periods. This literature has given fundamental insight in the behavior and the complexity of inventory systems for perishable products. In practice, many grocery retailers have recently automated the inventory replenishment for non-perishable products. They recognize they may need a different replenishment logic for perishable products, which takes into account e.g. the age of the inventory in the system. Due to new information technologies like RFID, it now also becomes more economically feasible to register this type of information. This paper suggests a replenishment policy for perishable products which takes into account the age of inventories and which requires only very simple calculations. It will be shown that in an environment, which contains important features of the real-life retail environment, this new policy leads to substantial cost reductions compared with a base policy that does not take into account the age of inventories.

Consumer responses to shelf-out-of-stocks of perishable products

Purpose – This paper aims to identify customer behavior with regard to out‐of‐stocks (OOS) of perishable products (focused on bakery bread) and the resulting inventory performance for these perishable products.Design/methodology/approach – Insights on how consumers behave when their preferred bread product is OOS are derived based on 3,800 customer interviews performed in three stores of a large Dutch grocery retail chain. Next to this, additional logistical information was measured on regular moments with respect to the shelf availability per stock‐keeping unit during the day and to waste at the end of the day.Findings – The customer behavior with regard to perishables is observed to be different from that for the non‐perishable items. The key observation is that customers have a high willingness to substitute. The incorporation of the obtained knowledge of the observed consumer buying behavior into the existing automated store ordering (ASO) systems is discussed. In the current ASO systems, no distincti...

Identification of Employment Concentration Areas

This article presents a method to identify “Absolute and Relative Employment Concentration (AREC) areas” for a particular industry. Two novel characteristics of the method are that it simultaneously analyses AREC, and that it combines spatial concentration per area with the spatial concentration in neighbouring areas. The method is easy to understand and apply. It is developed to assist regional policy makers and corporate decision-makers with their investment decisions related to new infrastructure or plants. The identification of concentration areas also allows for analysing the performance of these areas in relation to characteristics such as infrastructure availability and the housing and labour market. This can yield new academic insights that are relevant for regional planners. An application of the newly developed method to five industries in a Dutch province subdivided into 502 areas illustrates the value of the method in comparison to other methods.

Proximity matters : synergies through co-location of logistics establishments

Although anecdotal evidence suggests that co-location of logistics establishments can bring about several benefits for the co-located logistics firms. These benefits have not been widely researched. This article seeks to contribute to an understanding of the spatial concentration of logistics establishments by empirically analysing the synergies they achieve through co-location. A survey of managers of 507 logistics establishments in the south of the Netherlands tested for differences in behaviour and circumstances between co-located and non-co-located establishments. The results show that synergies arise through co-location of logistics establishments: co-located logistics establishments more often combine transport capacity, have better availability of truck drivers, are better accessible, have better availability of repair and maintenance facilities, and have better expansion opportunities than do non-co-located logistics establishments. This means that regional aspects can be important variables in the location decisions of logistics firms.

Networked inventory management information systems: materializing supply chain management

Aims to explain the driving forces for networked inventory management. Discusses major developments with respect to customer requirements, networked organizations and networked inventory management. Presents high level specifications of networked inventory management information systems (NIMISs). Reviews some decision systems for inventory management, and compares traditional inventory management to networked inventory management. Uses these insights to outline NIMISs for several types of inventory management decision systems. Summarizes the results of the study, and provides an outlook on further research.

The use of advance demand information in a project-based supply chain

In a project environment, a manufacturer is confronted with two types of demand: regular demand from many small orders and very irregular, lumpy demand from infrequent, large orders. Manufacturers who build to stock must carry large safety stocks to meet the lumpy demand. As part of the project engineering process, however, project engineers and implementers (e.g. installers) typically have developed information about material requirements well in advance of placement of orders. We analyze the inventory reduction that could be achieved if the installer were to communicate advance demand information (ADI) to the manufacturer. We look at it in particular when the bid is placed. We focus on the following characteristics of available ADI in project environments: First, ADI information is uncertain, because decisions on installer and manufacturer selection have not yet been finalized. Second, information is detailed, available at the item level. We show that ADI is particularly valuable when potential demand for large projects is irregular and when proposals for potential projects have a high probability of leading to orders.

Two replenishment strategies for the lost sales inventory model: A comparison

Copyright (c) 1996 Elsevier Science B.V. All rights reserved. For the lost sales inventory system we distinguish two different replenishment strategies. The simplest strategy is the classical lfixed reorder levelr replenishment rule: every period the inventory position in the system is raised up to a fixed quantity S. For this simple strategy we derive and test heuristics for the determination of the reorder level, given a target service level. Next we demonstrate that it may be more efficient in a lost sales system to use a different replenishment strategy. This alternative replenishment strategy however is more complex. Therefore a comparison is made between the two replenishment strategies in a lost sales environment, to get an indication of the price which has to be paid here for simplicity.

An innovative survey in the transportation and distribution sector

Describes an experiment begun in 1994 at Eindhoven University in The Netherlands, which aimed for the integration of research, education and knowledge transfer to industry. This experiment focused on the transportation and distribution (TD to involve a group of students who were ready to start their graduation project; and to help T&D companies to improve their competitiveness. Benchmarking was used to find the key success factors. Discusses the organizational setting and the methodology of the experiment. Pays attention to the issue of segmentation, which is considered to be crucial in benchmarking.

Design of Operations Management Internships Across Organizations--Learning OM by Doing OM

To teach operations management (OM), we had students work full time in companies, analyzing problems and developing solutions. Fifteen students worked in different companies but on related OM topics, and we created many opportunities for them to exchange knowledge, ideas, and experiences. We organized the project around supply chains in the electrical installation industry and in the pharmaceutical industry and involved manufacturers, wholesalers, and installers or pharmacists. It was important to keep the complexity of the analyses manageable, to stimulate information exchange between the companies, and to separate analysis from negotiation over the sharing of benefits. The Supply-Chain Logistics and Information Management (SLIM) project was valuable for students and for university staff, and it helped the companies to develop and implement improvements in their supply chains.

Improvement Opportunities in Retail Logistics

In this chapter, we have shown that both customer service and the capacity utilization in retail chains can be increased by improving the logistic decisions taken by the retailer. New teclmologies allow the retailers to improve their logistic decisions by increasing either the level of differentiation, the level of sophistication and/or the level of integration in their decisionmaking. In many retail chains, different items need different logistic solutions. In this chapter, we distinguished five product categories: items that are phasing-inlout, items that are on promotion, items that are driving the utilization of capacities, and regular items. All these categories require a different way of controlling the operations. Most ASO systems currently applied are primarily developed for regular items. In this chapter, we describe how these ASO systems can be improved to also support other products. Al though the findings are based on observations at Dutch retailers, discussions with retailers in other countries indicate that most results also apply elsewhere. A final remark can be made on the importance of labor costs in retail chains, and its impact on the focus of Retail Logistics. In many retail chains, we noted that labor costs by far outweigh the inventory holding costs at the operational level (i.e. if the size of the store, the product as sortment and the planograms are fixed). This implies that a major focus of top management in retail chains should be on how to improve labor efficiency. Little scientific research has been done in this area, and so more research is needed to get a better understanding of the factors detennining labor efficiency in stores.