Patricio Donoso

Internal supply chain management in the Chilean sawmill industry

Purpose – The existing business paradigm in the sawmill industry is that improvements are achieved by enhancements at each individual sawmilling plant. The authors investigate a collaborative approach, and propose a model for optimizing production and inventory planning decisions within a system of plants.Design/methodology/approach – The methodology models the sawmill production process in terms of two transformation stages and two inventory stages. The authors then extend the model to account for supply chain decisions consisting of timber transfers among plants. They apply the model at 11 Chilean sawmills to evaluate whether they can benefit from operating in a more integrated manner.Findings – The authors find an opportunity to increase profits by more than 15 percent through a higher utilization of the capacity and a better assignment of production orders.Research limitations/implications – The study neglects the possibility of exchanging raw material among plants. Also, the findings are derived from...

Assessing an ambulance service with queuing theory

We describe an ambulance service in terms of its main operation parameters and strategic decision variables. Assisted by queuing theory, we calculate the key performance indicators (KPI) that concern the manager and the KPI that concern the patient. We use them to improve the operation of a private ambulance service in Chile. First, we evaluate whether the historical performance is consistent with the resources deployed. Then, we estimate the impact of some operational enhancements, such as reducing the cycle time or enlarging the fleet. Finally, we optimize the geographical coverage of the bases. We conclude that simple mathematical expressions are very useful to evaluate and improve the operation.

Who wants to break the hockey-stick sales pattern in the supply chain?

The hockey-stick pattern faced by suppliers consists of sales spikes at the end of each period. One of its causes is the information asymmetry that favors the retailer, who has better knowledge about the stochastic consumer demand. Because of delayed purchases, the supplier is induced to offer promotions, allowing the retailer to forward-buy at low prices. We model this situation as an infinitely repeated game, where each stage-game is subject to imperfect information. Drawing from the Nash equilibrium, we express sales and inventories in terms of demand, cost and the strategies players may adopt, and derive the conditions for a cooperative equilibrium.

Semi-autonomous planning using linear programming in the Chilean General Treasury

Abstract The Chilean General Treasury is the governmental institution that, among other functions, is in charge of collecting debts from taxes, credits, and fees. Until now the central office in Santiago has performed the planning, which has caused inefficiencies due to the lack of knowledge of the local realities of 35 offices across the country. In order to allow for more independence, and yet not lose control, we develop a system in a spreadsheet that allows each office to perform its own planning. The system consists of a multi-period linear program that considers a combination of parameters that depend on each region. The primal optimal variables provide the production goals for each period that allow an objective performance appraisal, while the dual variables allow comparing the marginal benefit of allocating additional resources to the different offices.

Optimal Planning of a Multi-Station System with Sojourn Time Constraints

This paper studies a dynamic production system where multiple products must visit stations where inventories are constrained by maximum and minimum sojourn times with neither negative flow nor backlog being allowed. A resource availability constraint limits the aggregate throughput of the stations. The objective is to minimize the sum of flow and inventory cost. The problem is broken down into several single-product serial systems that serve as subroutines of a Lagrangian relaxation routine. This model is implemented in a spreadsheet so that it can be used by the officials of a Chilean institution for planning the operations and defining the optimal allocation of resources.

The value of information in a long–term hydro–thermal electrical planning model

This article presents the analysis, comparison, and application of two alternative models to the optimal long–term operation planning of an hydro–thermal power system under conditions of uncertainty. The electrical system considered comprises one large reservoir, with interannual regulation capacity, and several smaller ones. The analyzed models employ stochastic dynamic programming as the solution methodology. The fundamental problem is to decide, on every temporal stage, how much water to use for generating purposes and how much to store, in order to minimize the total thermal and shortage costs. The original version of the studied model, created originally to forecast fuel consumption, assumes that the decision regarding the water release from the main reservoir is taken knowing the future hydrologic conditions. This criterion is known as wait–and–see. On the contrary, the new versions of the model, proposed in this article, consider a here–and–now criterion. Specifically, it is assumed that the future hydrologic conditions are not known at the time of making the operational decisions. The difference between the optimal cost of the proposed models and the original model defines the value of having the information regarding future hydrologic conditions before taking any decision. This value is generally known as the expected value of perfect information.

MODAL CHOICE MODELLING FOR SEVERAL ALTERNATIVES : APPLICATION OF DISAGGREGATE DEMAND MODELS IN SANTIAGO, CHILE

Disaggregate choice models estimated with a 1977 data base are used to evaluate the economic feasibility of several alternatives for extending the Santiago underground system. More sophisticated models developed with a 1981 data base for a particular urban corridor in the city are compared with models calibrated for a similar situation in England. Finally, the models estimated in 1981 are used to predict the impact of an increase in Metro fares that was actually implemented in 1982 and a comparison is made with the actual impact observed.