Mustafa H. Tongarlak

Optimizing Organic Waste to Energy Operations

A waste-to-energy firm that recycles organic waste with energy recovery performs two environmentally beneficial functions: it diverts waste from landfills and it produces renewable energy. At the same time, the waste-to-energy firm serves and collects revenue from two types of customers: waste generators who pay for waste disposal service and electricity consumers who buy energy. Given the process characteristics of the waste-to-energy operation, the market characteristics for waste disposal and energy, and the mechanisms regulators use to encourage production of renewable energy, we determine the profit-maximizing operating strategy of the firm. We also show how regulatory mechanisms affect the operating decisions of the waste-to-energy firm. Our analyses suggest that if the social planners objective is to maximize landfill diversion, offering a subsidy as a per kilowatt-hour for electricity is more cost effective, whereas if the objective is to maximize renewable energy generation, giving a subsidy as a lump sum to offset capital costs is more effective. This has different regulatory implications for urban and rural settings where the environmental objectives may differ.

Metamodelling for cycle time-throughput-product mix surfaces using progressive model fitting

A simulation-based methodology is proposed to map the mean of steady-state cycle time (CT) as a function of throughput (TH) and product mix (PM) for manufacturing systems. Nonlinear regression models motivated by queueing analysis are assumed for the underlying response surface. To ensure efficiency and control estimation error, simulation experiments are built up sequentially using a multi-stage procedure to collect data for fitting the models. The resulting response surface is able to provide a CT estimate for any TH and any PM, and thus allows the decision maker to instantly investigate options and trade offs regarding their production planning.

Converting retail food waste into by-product

By-product synergy (BPS) is a form of joint production that uses the waste stream from one (primary) process as useful input into another (secondary) process. The synergy is derived from avoiding waste disposal cost in the primary process and virgin raw material cost in the secondary process. BPS increases profit and can have a positive environmental impact by reducing waste. We investigate how BPS can mitigate food waste in a retail grocer setting, and how it interacts with other mechanisms for reducing waste (i.e., waste disposal fee and tax credit for food donation). In the retail setting, waste is generated because of demand uncertainty – the retailer stocks inventory without knowing demand and excess units become waste. We derive the retailer’s optimal order policy under BPS and the order policy for a more practical hybrid implementation of BPS, and compare these BPS implementations to the benchmark case where the retailer only sells fresh produce (“Fresh Only”). We show that the benefit of BPS increases in primary demand uncertainty, but decreases in secondary demand uncertainty. We find that BPS can reduce waste when secondary demand uncertainty and the net tax benefit from donation are low, but can increase waste if increased secondary demand uncertainty drives up safety stock. Our results suggest that under BPS, the threshold net tax benefit required to induce donation increases because BPS competes with donation for excess primary units. We find that the tax credit and disposal fee are substitute mechanisms for inducing food donation.

Using Simulation Early in the Design of a Fuel Injector Production Line

Delphi Corporation decided to use simulation from concept development to installation of a new multimillion dollar fuel injector production line. In this paper we describe how simulation was employed in the concept development phase to assess whether production targets required for financial viability were feasible and to identify the critical features of the line on which to focus design-improvement efforts.

Mechanisms for Increasing Sourcing from Capacity-Constrained Local Suppliers†

The fresh produce supply chain is characterized by large (mainstream) farms that are located far from consumers, and capacity-constrained (local) farms that are located close to the consumer. In this setting, we study: (i) how leadtime and capacity asymmetry between mainstream and local farms affect a retail grocers order policy for fresh produce, and (ii) how various operational mechanisms can increase the amount sourced from local farms. We show that this supply chain structure is disadvantageous for local suppliers (farms) because it induces the retailer to treat the local supply as a de facto responsive supply without paying a premium for the responsiveness. This disadvantage is exacerbated when the retailers objective is to achieve a high service level. We study three mechanisms that can improve conditions for local farms: working with an intermediary, backhauling, and a retail order policy, purchase guarantee, that explicitly supports local farms. The intermediary and backhauling mechanisms help the local farm by making local supply more attractive to the retailer, inducing her to order more locally sourced produce. The intermediary reduces the retailers overstock and stockout costs whereas backhauling increases the average margin. The purchase guarantee order policy helps local farms at the expense of retail profit. However, we show that purchase guarantee and backhauling are complementary mechanisms that together can benefit the retailer and local farms.

Relative error stochastic kriging

We use stochastic kriging to build predictors with bounded relative error over the design space. We propose design strategies that guide sequential algorithms with and without adaptation to the data to make allocation and stopping decisions such that a prespecified relative precision is realized with some confidence. We also present an empirical evaluation of the proposed design strategies.

Using simulation early in the design of a fuel injector production line

Delphi Corporation decided to use simulation from concept development to installation of a new multimillion dollar fuel injector production line. In this paper we describe how simulation was employed in the concept development phase to assess whether production targets required for financial viability were feasible and to identify the critical features of the line on which to focus design-improvement efforts.