Simone Zanoni

A note on an industrial strategy for stock management in supply chains: modelling and performance evaluation

An analytic formulation of consignment stock (CS) policy has been proposed in Braglia and Zavanella (2003, International Journal of Production Research, 41, 3793) where an implicit analytical solution is given. In this note it is shown that this solution has properties that enable it to be developed into a completely explicit form, allowing for a joint optimization of all decision variables governing the delivery management.

Cost performance and bullwhip effect in a hybrid manufacturing and remanufacturing system with different control policies

In recent years, remanufacturing has emerged as an important research area. This requires developing methods and models in order to aid companies in systematically evaluating current as well as projected remanufacturing systems. This paper addresses the inventory control problem in a hybrid inventory system with manufacturing and remanufacturing options. In this study, by changing the definition of inventory position of the serviceable stock, we introduce a shift PULL inventory control policy, which is compared with PULL, DUAL, and Separate PULL control policies studied previously in the literature. Besides evaluating the economic consequences with different control policies, we also study system dynamic behaviour such as the bullwhip effect, in order to understand the advantages and disadvantages of different policies. After the experiments, we propose several management guidelines for such a hybrid inventory system. The major findings are: (1) separate PULL and DUAL can be good alternatives when the manufacturing lead time is significantly longer than the remanufacturing lead time; (2) shifted PULL exhibits a good performance when the two lead times differ slightly. Owing to the complexity in solving the optimization problem, a simulation approach is used.

Single-vendor single-buyer with integrated transport-inventory system: Models and heuristics in the case of perishable goods

We consider the problem of shipping a set of products from a single origin (the vendor) to a common destination (the buyer) with the objective of minimizing the sum of the inventory and transportation costs, when a set of shipping frequencies is given and products are assumed to be perishable. We provide a mixed integer linear programming model for the problem and propose the modification of known heuristic algorithms to solve it. Extensive computational results show how some of the modified heuristics are extremely efficient and effective.

Vendor-managed inventory with consignment stock agreement for single vendor–single buyer under the emission-trading scheme

This paper presents a joint economic lot size (JELS) model for coordinated inventory replenishment decisions under the vendor-managed inventory (VMI) with consignment stock (CS) agreement and an emission-trading scheme. The paper assumes a single product that flows along a two-level supply chain system, with a single vendor and a single buyer. The total cost of the system is the performance measure, which is the sum of the vendor’s and the buyer’s total costs. The total cost includes the set-up and order costs, inventory holding costs, greenhouse gases (GHG) emissions tax and penalty costs. A mathematical model is proposed to determine: (1) the vendor’s production lot size quantity; (2) the number of shipments sent by the vendor to the buyer in a cycle; and (3) the production rate that minimises the total cost of the supply chain. Some numerical examples are carried out, as well as comparisons with the traditional JELS model for a classic two-level supply chain. Results show that the performance of the system is better when it is operated under a VMI with CS agreement, which is capable of reducing the traditional inventory holding costs and, for some values of given parameters, the GHG emissions tax and penalty costs.

Layout design in dynamic environments: Strategies and quantitative indices

The design of a layout is a critical step, which may have a major influence on the success of a plant, particularly when demand is uncertain and variable. In order to counter this variability, one of two strategies is generally adopted, i.e. the identification of either a robust or an agile layout. This study proposes the adoption of indices that will help in identifying the strategy to be preferred. Starting from the case of a single row layout, the results of an experimental campaign are presented and discussed in order to show the efficacy of the indices themselves. Their calculation takes into account the profile of demand over time together with the product route sheets.

Economic evaluation of disassembly processes in remanufacturing systems

A model to deal with the disassembly processes in remanufacturing systems is presented with focus being on evaluating their economic consequences. More specifically, the model assists decisions such as to which degree and for the sake of which components should the returned items be disassembled. Consequently, using the economic values of recoverable items, the inventory holding costs of these items are obtained. This information is further used to determine the inventory control policy. To access such economic values, the above average cost approach is compared with the net present value method. The latter is often considered a more ‘correct’ way in remanufacturing systems from the viewpoint of inventory control. The results from the economic evaluation model are intended to aid companies in systematically evaluating current as well as projected remanufacturing systems.

A joint economic lot size model with price and environmentally sensitive demand

This paper presents a joint economic lot size (JELS) model for coordinated inventory replenishment decisions considering price and environmentally sensitive demand. It assumes a single product that flows along a two-level supply chain (vendor–buyer). The buyer’s demand is linear and sensitive to the product’s price and its environmental performance. A capital investment is considered necessary to improve the production process resulting in an indirect improvement of the product’s environmental quality. A mathematical model is developed to represent this situation and solved to maximize the total profit of the supply chain for: (1) the vendor’s production lot size quantity and the number of shipments to the buyer, and (2) the selling price and the amount invested to improve the production process. Numerical examples are provided with their results discussed.

Multi-product economic lot scheduling problem with manufacturing and remanufacturing using a basic period policy

In this research we study the multi-product Economic Lot Scheduling Problem (ELSP) with manufacturing and remanufacturing opportunities. Manufacturing and remanufacturing operations are performed on the same production line. Both manufactured and remanufactured products have the same quality thus they fulfil the same demand stream. Tang and Teunter (2006) firstly studied this type of Economic Lot Scheduling Problem with Returns (ELSPR) and presented a complex algorithm for the optimal solution. More recently Teunter, Tang, and Kaparis (2009) proposed several heuristics to deal with the same problem using more computational efficient approaches. However, both studies have limited the attention to the common cycle policy with the assumption that a single (re)manufacturing lot is used for each item in each cycle. Relaxing the constraint of common cycle time and a single (re)manufacturing lot for each item in each cycle, we propose a simple, easy to implement algorithm, based on Segerstedt (1999), to solve the model using a basic period policy. Several numerical examples show the applicability of the algorithm and the cost savings.

A consignment stock coordination scheme for the production, remanufacturing and waste disposal problem

This paper extends the model of a production, remanufacturing and waste disposal system by adding a buyer (retailer) to the vendor’s system to form a two-level forward/reverse supply chain. The vendor and the buyer are assumed to operate according to a consignment stock policy. A mathematical model is developed for the cases when the production and remanufacturing batches are of different and equal sizes. The model also accounts for transportation, inspection and sorting costs. Numerical examples are provided and results are discussed. The results show that the collection rate of used items and the repairable rate have a significant impact on the total cost of the system and the batch sizes. It was suggested that it may not be possible to operate a system like the one described in the paper at its maximum environmental edge without receiving some incentives or tax brackets. Another possibility is for the system to undergo a continuous improvement process to reduce its operational costs, which may require additional investment.

Combining make-to-order and make-to-stock inventory policies: an empirical application to a manufacturing SME

This article focuses on decoupling point and inventory policy decisions in manufacturing companies supplying products with different demand patterns and customisation levels. In such a context, adopting a pure make-to-order (MTO) approach may severely affect the response time for standard and regular products while, on the other hand, a pure make-to-stock (MTS) policy may result in excess inventory. To overcome this, companies tend to adopt hybrid and dynamic MTO–MTS policies, but decisions are often taken without the support of a rational model. In this article we develop a rational model to support inventory management decisions in a MTO–MTS context and bridge the gap between theory and practice. Starting from a real-life case study, we develop a decision-making approach that employs simple models, methods and tools, thus making it suitable for practical implementation in small and medium sized enterprises (SMEs). Different product characteristics are analysed in order to develop a framework for choosing the most suitable decoupling point and replenishment policy (such as economic order quantity, EOQ) and for determining the parameters of the chosen policy (such as lot size). The simplicity of the procedure together with the positive results achieved in this first case study implementation suggest that the new framework has the potential to improve the inventory policies adopted by SMEs in a MTO–MTS context and should be refined and developed through further case study research.