Ronald H. Ballou

Stochastic Vehicle Routing Problem with Restocking

In this paper, a stochastic vehicle routing problem is considered. In particular, customer demand is assumed to be uncertain, and actual demand is revealed only upon the visit to the customer. Instead of adopting the simple recourse action of returning to the depot whenever the vehicle runs out of stock, the points along the route at which restocking is to occur are designed into the route. The restocking points may be before a stockout actually occurs. Two heuristic algorithms are developed to construct both single and multiple routes that minimize total travel cost. The computational results show that the heuristic procedures produce quality solutions and are efficient.

The evolution and future of logistics and supply chain management

Purpose – This paper traces the evolution of logistics and supply chain management (SCM) and projects the state of the field in the near term with the attendant challenges for those who must plan and control logistics/supply chain operations.Design/methodology/approach – Key events that created business logistics are noted, the views of the field leaders are identified and assessed, and research outcomes are compared as a basis for how logistics/SCM is viewed today.Findings – The scope of the field has broadened bringing new challenges for researchers and managers, but the broader scope was envisioned from its formation. Improvements in information technology and the just‐in‐time philosophy are the principal drivers for realizing the potential of boundary‐spanning channel management.Research limitations/implications – The conclusions and projections are based on the authors interpretation of the events surrounding logistics and the supply chain as they have occurred over the last 45 years.Practical impli...

Supply chain benefits from advanced customer commitments

Abstract Buyers are frequently encouraged through price discounts to buy in certain ways — purchase in large quantities or purchase in advance of their needs. Ideally, these pricing incentives can lead to lower costs for both the buyer and the seller. In this paper, a situation is examined where a steel distributor faces stiff competition in its highly undifferentiated service offerings and price is the primary factor in attracting sales. A model is developed that quantifies the benefits to the supplier from obtaining advanced commitments from downstream customers. This model can be used to suggest the maximum price discount that can be offered to customers to encourage them to commit to their orders in advance. Careful balancing of the advanced ordering time with the price discount can lead to cost reductions for both members of the supply channel.

Reverse logistics: simultaneous design of delivery routes and returns strategies

A reverse logistics problem, motivated by blood distribution of the American Red Cross, is examined where containers in which products are delivered from a central processing point to customers (stops) in one period are available for return to the central point in the following period. Any container not picked up in the period following its delivery incurs a penalty cost resulting primarily from operating costs and customer dissatisfaction. The result is a dynamic logistics planning problem where in each delivery period the vehicle dispatcher needs to design a multi-stop vehicle route while determining the container quantities to be picked up at each stop. This research is unique in that route design and pickup strategies are developed simultaneously, where stop volumes are known only probabilistically over a planning horizon. A heuristic procedure is developed for treating the route design-pickup strategy planning problem.

Unresolved Issues in Supply Chain Network Design

Designing a supply chain network provides the basic structure for supply chain operations, where the network is a major element in a firms competitiveness and a significant area of capital investment. With the boundary-spanning scope encouraged by supply chain management, the question is whether existing analyses used for network design are adequate. The general answer is yes, because the number of echelons that the analysis must span is self-limiting to a relative few. However, there remain unresolved issues in network design analysis and in the models used to support the analysis that can enhance its accuracy, appropriateness, and acceptability to practitioners. Issues discussed relate to the development of better models, the treatment of the data needed by them, and the need for comparing the various models for network design.

Fellowship in Lifelong Learning: an Executive Development Program for Advanced Professionals

Typical executive education is unresponsive to the needs and style of advanced professionals in management. The Professional Fellows Programwas designed as a nondegree, self-designing program with no discipline-defined courses or grades. Typically, Fellows pay for the program personally. An outcome study showed that 1 to 3 years after the program, Fellows had (a) greater self-confidence, in particular the confidence to change; (b) increased sense of taking control of their lives; (c) created a legitimacy for working on life/career transitions; and (d) become members of a new reference group. This suggests a different pedagogy for advanced professionals with possibilities for innovation in other management education programs.

SELECTED COUNTRY CIRCUITY FACTORS FOR ROAD TRAVEL DISTANCE ESTIMATION

Road distances are conveniently estimated from distance functions that frequently must be corrected with a multiplier, referred to as a circuity factor, in order to approximate actual travel distances. For various regions of the world, these circuity factors differ due to such factors as road network density, travel obstacles, in hilliness. In this note, the circuity factors resulting from a sampling of road networks for various countries and country regions throughout the world are presented. They are particularly useful in designing logistics networks, routing vehicles, and planning in other geographically based logistics applications.

Revenue estimation for logistics customer service offerings

– In logistics strategy, it is now being recognized that revenue generation is as important as cost reduction. Although it has long been known that logistics customer service has a positive effect on customer satisfaction, little research has been conducted to determine precisely the degree to which logistics customer service affects sales and generates the revenues for the firm. The purpose of this paper is to identify, categorize, and illustrate methods for estimating revenues associated with various levels of logistics customer service offerings., – The purpose is achieved through simulation, statistics, and case studies., – When the revenue effects of logistics customer service can be approximated, logistics strategies can be formulated that optimize profits and/or return on investment. Otherwise, logistics strategy is in danger of being sub‐optimized when logistics customer service levels are treated as planning constraints and costs minimized to meet them., – The paper sets forth a number of methods by which this sales‐service relationship can be generated and the effect of service on sales quantified. This provides an important basis for optimizing logistics strategy.

Evaluating inventory management performance using a turnover curve

Managing inventory levels in the aggregate is a common concern of senior management. A generalized formula (turnover curve) developed in previous research that mimics practical inventory control is used to audit inventory control performance of inventories in the aggregate and at multiple stocking points. The same turnover curve is used to estimate the impact of changing the inventory control procedures or to set new targets for inventory levels. It is a simple yet powerful tool for evaluating inventory managerial performance that can be developed from readily available company data. This research provides additional examples to further validate the practical usefulness of the turnover curve.

Optimizing Auto-Carrier Loading

Delivering automobiles, vans, and trucks to auto dealerships is a unique problem among the routing and scheduling problem class. A subproblem is that of loading the vehicles onto an auto-carrier (equipment specially designed for this purpose). Allocation of the vehicles to this equipment has typically been done by means of trial and error and heuristic methods. This paper shows how the loading aspect of the delivery problem can be solved using optimizing methods. The approach has the potential of replacing the empirical methods currently used in practice.