International Journal of Procurement Management (36 papers in press)
Risk and Revenue of a Lessors Dynamic Joint Pricing and Inventory Planning with Adjustment Costs under Differential Inflation
by Masoud Rabbani, Amir Aghsami, Shabnam Farahmand, Sina Keyhanian
Abstract: Leasing decision making problems have attracted attention in recent years mostly benefiting from operational research tools. This paper investigates crucial missing assumptions from the newly emerged integrated sales-leasing problem (ISLP). New assumptions are considered such as price adjustment costs, for employing impact of price changes, and differential inflationary condition under which lease payments and operational costs are deflated and inflated respectively. Impact of default risk has been considered by variance of net present value in objective function. The ISLP mathematical model has been developed with new constraints and objective functions. Also, the conditions of Taylor expansion approximation have been discussed for models parameters. Optimal and Pareto solutions have been obtained for small and large size sample problem by exact approach and a meta-heuristic algorithm. Eventually sensitivity analysis has been provided for parameters of model such as optimal revenue, risk and lease payments behaviour in terms of increase in various inflation rates. Results show that for the competitive inflation-sensitive demand functions, an increase in inflation, causes less demand for purchase and more risk for leasing and therefore a decrease in total revenue.
Keywords: : Leasing; Pricing; Inventory Planning; Price Adjustment Cost; Differential Inflation.
A Production Inventory Model for Deteriorating Products with Selling Price Dependent Consumption Rate and Shortages under Inflationary Environment
by Mohit Rastogi, Shivraj Singh
Abstract: In todays highly competitive market every business needs a high investment which is directly correlated to the return of the investment. The business will not be advantageous, if the return rate of investment is lesser than the inflation rate. In almost developed models it is believed that distinct costs related with inventory systems will constantly all the time but in realism it is not true. As the time increases, inflation becomes a considerable function and the costs related to the model differ. This research article presents a production inventory model for deteriorating products with selling price dependent demand and shortages under inflationary environment. The production rate considered here is a function of occurring demand. The shortages during stock out assumed to be partially backlogged. The intention of this study is to compute the optimal value of production period and shortage period. A solution procedure and numerical example are presented to illustrate the implementation of proposed study. A sensitivity analysis with respect to distinct system parameters is also presented to check the stability of the optimal solution.
Keywords: Production; selling price dependent demand; deterioration; shortages; inflation.
A simulation/optimization approach to support resource allocation in a service firms
by Elpidio Romano, Domenico Iuliano
Abstract: Simulation modeling is a useful tool to produce a quantitative decision support in different application areas. It is extremely useful for predicting the constant changes that take place in a highly dynamic context such as that of services. This paper examines the wide-spread problem of extended waiting times for health services, considering a regional private hospital, through building and validation of a computer simulation model. Using Arena simulation software for modeling, analysis, visualization, and optimization of the patient flow within the service structure considered. The model will be utilized to simulate the impacts of different proposed operating strategies on waiting time and throughput rate for patients. The objective is to identify those strategies which lead to higher efficiency for the hospitals resources without decreasing in the quality for the patient care.
Keywords: Discrete Event Simulation; service system; resource management; decision support system.
Small- and Medium-sized Enterprises in Public Procurement in Primary Social and Healthcare Services
by Martti Saarela, Eija-Riitta Niinikoski, Matti Muhos, Ville Isoherranen, Pekka Leviakangas
Abstract: Small- and medium-sized enterprise (SME) policies tend traditionally to focus on supply-side support instruments. However, public procurement provides a potential demand-side SME policy tool to enhance SMEs and maintain competition in the market. SMEs are often under-represented in public procurement compared to their overall economic weight. Existing literature provides limited information on the instruments of public service providers to create business opportunities for SMEs. The aim of this single case study is to describe the role of SMEs in the statutory public service provision of primary social and healthcare. The study also provides insight into the public service providers ability to facilitate SME access to public procurement and thereby to enhance the efficiency of the local market. We found that a service voucher system could be an additional option for public procurement, as it allows more flexibility in involving small businesses in the production of public services.
Keywords: : public procurement; SME; SME policy; entrepreneurship; social and healthcare; micro-companies; micro-enterprises; public business support; service voucher; sparsely populated area; Finland.
IT outsourcing through group decision-making based on the principles of interval-valued intuitionistic fuzzy theory
by Hossein Sayyadi Tooranloo, Arezoo Sadat Ayatollah, Mohsen Karami
Abstract: The past decade has seen tremendous growth in the global use of information technology (IT) as a pivotal tool to gain competitive advantage. Organizations and enterprises often seek to optimize their IT-related operations by using the best available internal and external resources to achieve the greatest profit or output attainable through this technology. This has led to the increasingly important role of IT outsourcing in todays managerial and administrative approaches. The present study proposes an IT outsourcing model that employs an interval-valued intuitionistic fuzzy approach. The proposed approach uses the Shannon entropy in intuitionistic fuzzy environment to determine the weight of experts and those of IT outsourcing criteria. These weights are then used to obtain the aggregate expert opinion matrix based on the principles of interval-valued intuitionistic fuzzy numbers. The intuitionistic fuzzy TOPSIS is used to prioritize the suppliers. The proposed model is implemented for a governmental organization with seven supplier- and six IT outsourcing criteria.
Keywords: Outsourcing; Information Technology; Group Decision Making; interval intuitionistic fuzzy.
A Two-Echelon Supply Chain Inventory Model with Shortage Backlogging, Inspection Errors and Uniform Demand under Imperfect Quality Items
by Nughthoh Arfawi Kurdhi, Mar’atin Marchamah, Respatiwulan
Abstract: Actually, some production and inspection processes do not work perfectly, thereby producing a certain number of defective items and inspection errors. Previous imperfect-quality integrated inventory studies have mostly focused on developing models that do not consider two-way imperfect inspection under stochastic demand. Thus, this paper proposes a cost-minimizing integrated vendor-buyer production-inventory model that incorporates imperfect production quality, stochastic demand, and imperfect inspection processes. The imperfect inspection processes are Type I inspection error of classifying a non-defective item as defective and Type II inspection error of classifying a defective item as non-defective. Meanwhile, the demand is assumed uniformly distributed. The objective of this research is to determine the optimal order quantity and reorder point such that the expected integrated total annual cost is minimized. In order to solve the integrated model, an optimal solution procedure is developed. A numerical example is provided to illustrate the application of the model. Besides, a sensitivity analysis is also given to investigate the effects of six important parameters (the transportation cost, the buyers holding cost, the vendors holding cost, the percentage of defective items, Type I error, and Type II error) on the optimal solution.
Keywords: Integrated inventory model; shortage backlogging; imperfect items; inspection errors; uniform demand.
The impact of total costs and strategic supply on risk management in project business
by Anni-Kaisa Kähkönen, Katrina Lintukangas, Jukka Hallikas, Mika Ojala
Abstract: Purchasing and supply management can have a major impact on the success of project business. Project purchasing can cause huge problems for projects, but it can also be a major source of success. This study investigates the effect of total cost components, supply management capability and the status of supply management on risk management performance in the context of project business. A survey was conducted to collect data from companies engaged in project business in Finland. Based on the responses from 99 firms, it was found that the strategic status of supply management, supply capability, costs before and after purchasing and project duration have a significant effect on risk management. This gives a specific indication of where to focus risk management actions. Risk mitigation strategies, however, seem to be systemic in their nature in the sense that simultaneous strategies are probably needed to assure the effective flow of supply.
Keywords: Purchasing; Risk management; Total cost of ownership; Supply management; Project business.
The effects of the degree of produce perishability and the choice of procurement channel on supplier opportunism: Empirical evidence from the food processing industry
by Renger Kanani, Arnt Buvik
Abstract: Opportunism is an important topic in supply chain management and distribution channels. The emergence of this behaviour in buyer-supplier relationships tends to reduce performance while diminishing value creation in the effected relations. Different transactions call for different control levels depending on the gravity of opportunism in the transaction, with the need for control being higher as opportunism increases. In this regard, it is important to understand the factors that give rise to opportunism to apply appropriate control mechanisms. This study, therefore, explores the effect of the degree of the perishability of the transacted produce on supplier opportunism. Additionally, this study treated the choice of procurement channel as a control mechanism; therefore, we compared the effect of perishability on opportunism in direct and indirect procurement channels. In this study, cross-sectional survey data collected from 239 food processor-produce supplier relationships served as source of empirical evidence. The empirical findings support our hypotheses, and demonstrate that perishability is positively associated with supplier opportunism, with the effect being significantly lower in the direct procurement channels than in the indirect procurement channel.
Keywords: Transaction cost theory; perishability; opportunism; procurement channels; buyer-supplier relationships.
GENERALIZED FRAMEWORK FOR OPTIMAL PRE & POST RELEASE SOFTWARE TESTING IN PRESENCE OF WARRANTY
by Nitin Sachdeva, P.K. Kapur, Ompal Singh
Abstract: Significant advances in the field of software testing have been made by providing extended warranties, operational support and desired software reliability to the customers. However, the trade-off between minimizing testing cost and maximizing reliability to ensure well-timed market penetration has been a key concern for developers. Separate release and testing stop time strategy in order to optimize overall testing and market opportunity cost is proposed. We propose a generalized framework for developers to achieve multiple objectives of minimum testing and market opportunity cost; optimal warranty length; and optimal testing and release time. Software reliability growth models (SRGMs) are used to model an average number of bugs detected by testers (users) during the pre (post) release of software. Significant implications and quite intriguing facts related to separate release and testing stop time; early release ensuring higher reliability and; capitalizing market opportunity to minimize overall testing cost are suggested based on proposed optimization models. Numerical illustration is provided to validate the proposed framework.
Keywords: Pre & Post Release Software Testing; Software Reliability; Warranty; Market Opportunity Cost; Reliability.
A Sustainable Warehouse Selection: An Interpretive Structural Modelling (ISM) approach
by Rakesh Raut, Manoj Jha, Bhaskar Gardas, Vaijayanti Raut
Abstract: Warehouse selection has a strategic significance for many organizations, and it is a multi-criteria decision making (MCDM) problem. The objective of the present paper is to identify the critical success factors (CSFs) for the selection of sustainable warehouse for Indian chemical industries. Through the extensive literature review and expert opinions, fourteen (14) critical factors were identified, and the interpretive structural modelling (ISM) approach was used to establish an interrelationship among the critical success factors and to determine the key factor/criteria having high driving power. After analyzing the factors, it was found that four critical success factors, namely, the availability of the technology, strategic geographic location, the climate of the region, and government policies and regulations were found to have high influencing power. On the other hand, three critical success factors, namely, the overall cost of the warehouse, other organizations using the facility, effective water management provision were found to have high dependence and weak driving power. The developed ISM based model is intended to guide the organizational managers in understanding the significance of the sustainable warehouse selection.
Keywords: Warehouse Selection; Sustainability; Critical Success Factors (CSFs); Interpretive Structural Modeling (ISM); Chemical Industries.
SUPPLIER SELECTION: A PROPOSED FRAMEWORK FOR DECISION-MAKING
by Marcus Silva, Paulo Figueiredo
Abstract: This article presents and performs a preliminary validation of a framework for supplier selection. It makes use, in sequence, of Kraljic's supplier relationship portfolio and the multi-criteria decision tool named the Analytic Hierarchy Process (AHP). The proposal's main objective is to provide companies with a practical and easy-to-use tool for classifying the importance and criticality of raw materials and for selecting suppliers based on a hierarchy. One result of this action-based study is the preliminary validation of the proposed model through its application in an electronics company. The application of the method suggests an improvement in the company's supplier selection practices related to one key item of one of its products.
Keywords: supplier selection; supplier relationship management; supplier chain; purchasing process; Kraljic’s supplier relationship portfolio; Analytic Hierarchy Process; procurement.
BUYER-SUPPLIER INTEGRATION AND LOGISTICS PERFORMANCE IN HEALTH CARE FACILITIES IN TANZANIA: THE MODERATING EFFECT OF CENTRALIZED DECISION CONTROL
by Gladness Salema, Arnt Buvik
Abstract: This research concerns logistics performance in public purchasing relationships. It examines the effect of buyer-supplier integration on supplier logistics performance. Particularly focuses on purchasing centralization in health care facilities, and examine whether centralization of decision control exercised by the health authorities influence the effect of buyer-supplier integration on supplier logistics performance. A survey data of 164 informants from public health facilities in Tanzania was used for analysis. It reveals that buyer-supplier integration improves supplier logistics performance significantly and stronger purchasing centralization reduces the effect of buyer-supplier integration on supplier logistics performance. It provides a broad and interesting focus on significant antecedents to supplier logistics performance. In the future, the government should focus more on supporting the individual public health facilities in developing and adapting proper governance mechanisms for supporting buyer- supplier integration. Further research in other empirical and cultural settings is desirable to test the external validity of these findings.
Keywords: supplier logistics performance; purchasing centralization; buyer-supplier integration.
Implementing E-Tendering to Improve the Efficiency of Public Construction Contract in Saudi Arabia
by Moath Al-Yahya
Abstract: This paper presents an e-Tendering model developed for the public construction contract in Saudi Arabia to improve its efficiency. The research addresses the dilemma of traditional tendering and recommends the use of practical tools in order to improve the efficiency of the process. The demand from governments and the construction industry for paperless business processes has generated many commercial e-Tendering systems around the world. E-Tendering systems can be quite complex since they involve many stages or phases to meet the needs of both the public and private sectors. In the current study, numerous e-Tendering systems have been evaluated to provide background information to assist with the development of the proposed model. The proposed model is developed based on literature review, ten interviews, a focus group, and 52 questionnaire participants. The model allows a contractor to be involved during the design stage and participate officially during the design process. This feature seek to minimise the projects time and maximise the quality and transparency of e-Tendering in the construction industry. The challenge, thus, revolves around adapting the Saudi construction contract into the form of e-Tendering.
The implementation expectations are common across the government and the contracting industries. All participants can envisage an improvement in efficiency with the implementation of e-Tendering. The results also showed that the majority of the participants consider the distribution and receipt of the bids to, or from, the subcontractors and suppliers as the factor that can most easily be influenced by the efficiency of the e-Tendering process. Further, the findings highlight the importance of developing and maintaining best practice for the IT requirements and for the configuration of the whole e-Tendering model. The inclusion into the proposed model of relevant insights obtained from the interviews, the questionnaire, and the focus group ensures that the model has both theoretical and practical validity.
Keywords: e-Tendering; electronic tendering; e-Procurement; e-Bidding.
Optimal selling price and lot size for non-instantaneous deteriorating items with different demand rates and partial backlogging
by Ajay Gor, Hetal Patel
Abstract: This study is an extension of Maihami and Kamalabadi (2012) [Int. J. Production Economics, 136, 116122] by taking the demand rate as general function of price and time and it is different in different time interval. When deterioration starts, price discount is offered. This study also considers deterioration rate as general function of time. Back order rate is also taken as general function to develop a model. Numerical examples are presented to illustrate the model. Sensitivity analysis is carried out for major parameters and some managerial insights are proposed.
Keywords: Non-instantaneous deterioration; generalized demand rate; back order rate; price discount.
An analysis of replenishment model of deteriorating items with ramp-type demand and trade-credit under the learning effect
by Archana Sharma, Usha Sharma, Chaman Singh
Abstract: Effective management and control strategies are prerequisites in order to optimize inventory related decisions. Robust replenishment model can reduce overall inventory cost and increase financial surplus for the organization. Adoption of trade-credit strategy for deteriorating items provides economic benefits to the retailer (buyer) in settling the account for the fixed period and boosts the sales of the organization. Therefore, in this proposed model trade-credit is introduced and demands pattern follows ramp-type which is quadratic function of time for decaying items. Shortages are allowed and partially backlogged where the backlogging rate is dependent of waiting time. The inflation factor is also considered to propose realistic environment. Additionally, this study also considered the cost components which are followed by learning curve to improve the total inventory cost with strategic scheduling. Finally, the model is analysed through numerical examples and the sensitivity analysis is performed to test the robustness of the model.
Keywords: Ramp-type demand; Partial-backlogging; Learning effect; Trade-credit; Inflation.
Interactional Function of Risk Management and Value Engineering in Civil Projects (Case Study: 108-unit Residential Complex project in Parand New Town)
by Majid Razeghi Jahromi, Fatemehsadat Mousavifard, Abdolhossein Ayoubi
Abstract: Risk management is known as a process of properties maintenance and the ability in money making and value engineering and management is a inseparable part of risk management. Unified value management and risk management establishes synergy. This study is done with the intention of studying interactional function of value engineering and risk management in civil projects while Dallas model is considered as theoretical model. In this study implementation of value engineering and risk management was done in a unified practical way. Findings indicate that implementation of his model in construction phase of building project will lead to decrease in approximately certain costs as much as 24.77% while project temporary delivery and finalizing the project are getting near, decrease rate of final costs will reach 21.32%. After procedures and studying results of tables, it can be concluded that Interactional Function of risk management and value engineering in this project was accompanied with 7.35% of saving.
Keywords: Risk Management; Value Engineering; Civil Projects; Residential Complex project; Interactional Function; costs; saving; maintenance; delivery; Risk Measurement.
Multi Item Two Warehouse Fuzzy Inventory Model
by Rahul Waliv, Hemant Umap
Abstract: In this paper multi-item fuzzy profit maximization inventory model with ramp type demand under imprecise space, budget constraints and imprecise holding cost with two storage facilities. There are two warehouses one is situated at market place called as own warehouse (OW) and another is little away from market place called as rented warehouse (RW). The sale is conducted from OW and the sold items are replaced continuously by the items at RW. Here shortages are not allowed. The fuzzy model has been solved by using fuzzy nonlinear programming technique and illustrated numerically.
Keywords: Ramp type demand; Deteriorating items; Linear membership function; fuzzy nonlinear programming technique;.
An analytical approach for EOQ determination using trapezoidal fuzzy function
by Sudhir Kumar Sharma, Srikrishna Madhumohan Govindaluri
Abstract: Inventory management involves ordering right quantities of items for matching demand and supply. In inventory management, Economic Order Quantity (EOQ) problem deals with determining the quantity to be ordered for minimising the sum of ordering and holding costs. This problem has been discussed by a number of researchers under the assumptions of deterministic and uncertain environments. Many studies have also employed fuzzy sets to characterise the imprecision and uncertainty of supply chains in EOQ models. This paper proposes a fuzzy EOQ model where the decision variables, batch order quantity and maximum inventory, are modelled using trapezoidal numbers. The signed distance method is used for defuzzification. The results show that the trapezoidal fuzzy model allows incorporating uncertainty using the proposed fuzzy economic order quantity model with only a slight increase in the batch order quantities and total cost per unit compared to the crisp economic order quantity model, which assumes deterministic conditions.
Keywords: Trapezoidal fuzzy number; EOQ; Inventory management; Signed distance method; Total cost per unit.
A CLUSTER FIRST-ROUTE SECOND APPROACH FOR A CAPACITATED VEHICLE ROUTING PROBLEM: A CASE STUDY
by Serap ERCAN COMERT, Harun R. YAZGAN, Sena KIR, Furkan YENER
Abstract: In this study, a capacitated vehicle routing problem (CVRP) which dealt with minimum distance routes for vehicles that serve customers having specific demands from a common warehouse under a capacity constraint. This problem is an NP hard. We solved the problem as a hierarchical way (i.e. cluster-first route-second method). Firstly, customers were clustered using three different clustering algorithms; K-means, K-medoids and Random clustering with considering a vehicle capacity. Secondly, routing problems for each cluster were solved using a branch and bound algorithm. The proposed solution strategy was employed on a case study in a supermarket chain. Results of numerical investigation were presented to illustrate effectiveness of the algorithms using paired sample t tests. The results illustrated that the K-medoids algorithm provided better solution than the others.
Keywords: Capacitated Vehicle Routing Problem; K-Means Clustering Algorithm; K-Medoids Clustering Algorithm; Random Clustering Algorithm; Branch and Bound Algorithm.
E-procurement and SME involvement in public procurement of innovations: An exploratory study
by Jani Saastamoinen, Timo Tammi, Helen Reijonen
Abstract: Current public procurement policies in the European Union (EU) seek to improve small and medium-sized enterprises (SMEs) access to public procurement, and emphasize public procurement of innovations (PPI) and aim to promote a switch to e-procurement. However, many information and communication related barriers impede SME access to public sector contracts, which could be mitigated by knowledge management (KM). While e-procurement is expected to increase the involvement of SMEs in public procurement, it is not well-understood how or which KM properties of an e-procurement service will best facilitate PPI. This paper presents an exploratory inquiry of how suppliers perceive the properties of an e-procurement platform, and how these properties are associated with their involvement in PPI. The results show that while information exchange properties were not estimated to be as important as other properties they are nevertheless more important in the sense of being positively associated with participating in PPI.
Keywords: Public procurement; public innovation procurement; electronic procurement; e-procurement; SMEs; innovations; knowledge management; suppliers; public sector; contracting authorities; information exchange;.
Lead Time Reduction: Early Supplier Involvement and the Information Supply Chain
by John Hanson
Abstract: Lead time reduction is a central concern of Procurement, but is critical in the initial launch of newly designed or revised products. Early supplier involvement is often advocated for reducing these lead times, but empirical studies show equivocal results. This paper draws from literature on concurrent engineering to develop a framework for lead-time reduction in the supply chain. It is shown that these mechanisms depend on flows of information that is created during the process. There is, in effect a supply chain for information that must be recognized and managed. The conditions are identified that are necessary for early supplier involvement to result in lead time reduction and offered as testable hypotheses for future research.
Keywords: Early Supplier Involvement; Lead Time Reduction; Concurrent Engineering; 3DCE.
Optimizing Safety Stocks and Reorder Point when the Demand and the Lead-time are Probabilistic in Cement Manufacturing
by Karzan Ghafour
Abstract: Inventory control is an extremely challenging task, complicated by a probability of demand and lead-time. An inventory system attempts to balance between overstock and understock to reduce the total cost and achieve customer demand in a timely manner. The optimality of inventory policies for a cement industry is still unknown for many types of inventory systems. In this paper, probability distribution of demand during lead-time is considered when the demand and lead-time are probabilistic while extracting the optimal safety stock placement and the reorder point in cement manufacturing. Probability distributions of demand during lead-time include Pearson Type 6 four-parameter, Log-Pearson 3, Fatigue Life (Birnbaum-Saunders), and Inverse Gaussian Three-Parameter Distributions. The probability distribution of demand during lead-time is established when the demand and the lead-time are probabilistic; each one has a probability distribution function. The safety stock depends on the safety factor under certain service level and the standard deviation of demand during lead-time which can be obtained from the distribution. The quantities of the safety stock and the reorder point represent an optimal value at each position to avoid over or under stock, the most controversial issue in the inventory system.
Keywords: Safety stocks; Reorder points; Probabilistic demand; and lead-time.
A Framework for Assessment of SSCM Strategies with respect to sustainability performance: An Indian Thermal Power Sector Perspective
by Jitendra Narayan Biswal, Kamalakanta Muduli, Suchismita Satapathy, Sushant Tripathy
Abstract: The explosion of the population in India has put a tremendous pressure to generate huge amount of energy, particularly electrical energy. Indeed, more than 50% of the total electrical energy produced in the country is generated by the coal based thermal power plants and is expected to be continued for another 2-3 decades.Growing concern over the environmental effects caused by the supply chain activities of the power industries that affects ecosystems and quality of life adversely as well natural resource depletion has been drawing attention of organizations to focus on sustainability practices.Realizing the importance of sustainable practices in traditional supply chain management, an effort has been made to develop a framework by using AHP-TOPSIS to study SSCM strategies. The findings of the research will facilitate the analysis and assessment of managerial approaches for SSCM in power generation facilities with its differing aspects rather than few limited aspects.
Keywords: Thermal power plants; Sustainable supply chain management; AHP-TOPSIS.
A game theory model for pricing and supplier selection in a closed-loop supply chain
by Maryam Esmaeili, Somayeh Najafi Ghobadi
Abstract: In this paper, pricing and supplier selection in a closed-loop supply chain (CLSC) are modeled by a game theory approach. The CLSC includes one manufacturer and multi-suppliers with variable defective parts. The manufacturer is responsible for collecting the used products where the number of defective parts purchased from the suppliers is random variable. The suppliers determine their standard deviation and the wholesale price. For the defective parts greater than the expected number, the manufacturer penalizes the suppliers. The manufacturer determines the optimal selling price, the price of collecting a used product, the number of appropriate suppliers, and the penalty cost by maximizing the profit. The end demand is affected by the selling price, and the competition between the suppliers is considered based on the Bertrand model. The interaction between the manufacturer and the suppliers is modeled by the static and dynamic games to obtain Nash and Stackelberg equilibria. In the dynamic game, the manufacturer is the leader and the suppliers are the followers. Finally, the numerical examples and sensitivity analysis with respect to the main parameters are presented to illustrate the theoretical results.
Keywords: Closed-loop supply chain; Supplier selection; Pricing; Game theory; Defective parts.
An Inventory Model for Deteriorating Items with Time Dependent Holding Cost and Shortages under Permissible Delay in Payment
by Nabendu Sen, Sumit Saha
Abstract: This study is motivated by the work of Khanra et al.[Applied Mathematical Mathematics and Computation 218(2011)1-9].We have revisited their model taking into account the following points; (i) The demand rate as a+bt+csin(t) ,(ii) Shortages are allowed, (iii) Delay in payment is permissible under three different cases, i.e. case I: The credit period is less than the time of occurrence of shortages, case II: The credit period is greater than the time of occurrence of shortages and case III: The credit period is greater than the cycle time. Under these aforesaid assumptions, an inventory model is developed and solved to obtain optimal solutions for inventory system with deteriorating items. An algorithm is proposed to solve the developed model. Finally, numerical examples are given in support of the developed model and sensitivity analysis is carried out with suitable example. Justification for extension of the existing model in literature with above mentioned demand function and linear time dependent holding cost is also discussed in this paper.
Keywords: Delay in payment; Inventory costs; Deterioration; Backlogged; Profit; Demand rate; Shortage changes slightly; significant changes; Fluctuations in rate of demand; Lead time.
The effect of product quality uncertainty on quality-screening efforts: does the purchase frequency and procurement channel choice matter?
by Renger Kanani, Arnt Buvik
Abstract: Product quality uncertainty is one of the major concerns for buyers in online transactions. In fact, research into the consequences and control of this uncertainty in online transactions has increased considerably in recent years. However, product quality uncertainty poses challenges not only to online buyers, but also to offline buyers. Therefore, the objectives of this empirical study were to examine the effect of product quality uncertainty on quality-screening efforts in offline transactions, and whether the frequency of purchase from the same source and the choice of procurement channel may be used as control mechanisms to reduce this effect. Empirical evidence from 239 small food-processing firms shows that product quality uncertainty has a positive effect on quality-screening efforts. Moreover, our findings demonstrate that this effect decreases significantly when food processors purchase frequently from the same source, and when they buy directly from the farm rather than through intermediaries.
Keywords: quality screening efforts; product quality uncertainty; purchase frequency; procurement channel.
Purchasing Category Management: Providing Integration between Purchasing and Other Business Functions
by Jussi Heikkila, Riikka Kaipia, Mika Ojala
Abstract: Organising the purchasing and supply management (PSM) function has been changing due to the increasingly strategic role of the function requiring integration with other business functions and the entire supply chain. One solution is to organise PSM into categories - a common practice in todays manufacturing organisations. In this paper we explore how purchasing category management (PCM) affects cross-functional integration. We analysed purchasing category management practices through in-depth case-studies in four manufacturing firms in two types of industry. Our research contributes to the purchasing and supply management research in two ways. First, it addresses the role of purchasing category management in organising PSM in large manufacturing companies. Second, it elaborates on purchasing categories providing integration between purchasing and other business functions, suggesting how different mechanisms are needed for different contexts.
Keywords: purchasing; procurement; supply management; purchasing category; category management; purchasing category management; organisation; integration; organisational integration; cross-functional integration; case research.
A partial backlogging production-inventory lot-size model with time-varying holding cost and weibull deterioration
by Ajay Singh Yadav, Anupam Swami
Abstract: This paper presents an economic production model with time varying holding cost. The demand and backlogging rates are assumed to be continuous and varying with time. While the production rate is assumed to be stock dependent with unknown time horizon. Shortages are allowed with partial backlogging of demand. Deterioration is taken into consideration and the deterioration rate follows the weibull distribution pattern. The models generate optimal values of initial production run time, onset of shortages, and production recommencement time that minimizes the total relevant costs of production and inventory for any given set of system parameters. A numerical example and sensitivity analysis are given to validate the proposed models.
Keywords: Production; partial backlogging; inventory; variable holding cost; non instantaneous deterioration.
Inventory decisions in a closed-loop supply chain system with learning and rework
by Wakhid Ahmad Jauhari, Oktiviandri Hendaryani, Nughthoh Arfawi Kurdhi
Abstract: In this study, we investigate a closed-loop supply chain model consisting of a manufacturer and a retailer. The retailer orders items from the manufacturer to satisfy end customers demand. The manufacturer uses both regular production and remanufacturing processes to produce items to satisfy the demand from the retailer. The returned items are collected and screened by the manufacturer for recovering process. We consider learning process in both regular production and remanufacturing processes. In addition, the imperfect items produced during regular production are reworked. The model contributes to the current literature by allowing the inclusion of learning process in regular production and remanufacturing processes, imperfect items, rework and multiple cycle policy. Our objective is to optimize the percentage of used item purchasing price per raw material cost, retailer ordering cycle, number of regular production cycles and the number of remanufacturing cycles, so that the joint expected total annual profit incurred has the minimum value. Furthermore, an algorithm is proposed to find the optimal solutions of the proposed model. We also provide a numerical example and conduct a sensitivity analysis to illustrate the models behaviour and feasibility.
Keywords: closed-loop supply chain; reverse logistic; learning; rework; defective item; remanufacturing.
Supply Chain Coordination Voyage towards Supplier Relationship Management: A Critical Review
by Aishwarya Dash, Ranjit Das, Sushant Tripathy
Abstract: Supply Chain Coordination bridges gap between the point of origin and point of consumption in the supply chain network of companies that is from suppliers to end users to manage their dependence on each other. Now-a-days the Manufacturing organizations are using the power of Supplier Relationship for their survival in a high volatile market Place. This Research is focused on hundreds of past research work in the areas of coordination and their findings have been grouped under three categories like factors affecting Supplier Relationship Management (SRM), methodologies used to measure the performance of SRM & trends of SRM. The findings of this exploratory paper is to uncover the meaningful key factors, appropriate methodology used to measure the performance, and focused dynamic trends of supplier relationship management of manufacturing organisation in twenty fast centuries. Our study will be a guideline for supply chain managers to develop a strong covalent bonding with suppliers in present scenario.
Keywords: Supply chain coordination; Supplier Relationship; Performance Measurement Methodology.
e-Tendering Readiness in Construction: An A Priori Model
by Moath Alyahya, Martin Skitmore, Adrian Bridge, Madhav Nepal, David Cattell
Abstract: Electronic tendering (e-Tendering) is moving the construction procurement industry to more professional practice. Nowadays, many organisations have not made the move to e-Tendering or they dont practice e-Tendering fully. However, the growing use of e-Tendering requires organisations to have a minimum of electronic readiness (e-Readiness). In this paper, the need for an e-Tendering model in construction is demonstrated. Additionally, a conceptual e-Tendering Readiness Model (e-TRM) is developed to describe the status of an organisation readiness to adopt e-Tendering. This involves a review of previous e-Tendering models, the importance of e-Tendering models for the construction industry and the requirements for developing e-TRM. The e-TRM is then proposed to assess an organisation readiness prior to e-Tendering implementation. This involves five themes of People, Process, Work Environment, Technology and Service Providers. These five themes consist of 13 constructs representing the basic items of the e-TRM. The Service Providers theme is proposed for the first time as a necessary support for successful e-Tendering implementation. Finally, some suggestions are made for future work to empirically test the e-TRM.
Keywords: e-Tendering; e-procurement.
An Inventory model for Deteriorating Items with Expiry Date and Time Varying Holding Cost
by Seema Sharma, Sanjay Singh, S.R. Singh
Abstract: In this paper, an economic order quantity model for items which deteriorate and expire with time has been developed. The holding cost has been assumed to be a linear function of time, whereas demand has been considered as a function of expiry date and selling price. Shortages are allowed and partially backlogged. The model so developed has been discussed for two cases of partial backlogging (i) backlogging rate is taken to be constant and (ii) backlogging rate depends upon waiting time. A numerical example given here illustrates each case. Finally, sensitivity analysis is carried out to analyze the behavior of the model.
Keywords: Deterioration; Expiry items; Holding Cost; Partial Backlogging.
Analysing Contractor Prequalification Criteria in Construction: New Insights through Interpretive Structural Modeling
by ASHISH GOEL
Abstract: Previous research has established the importance of selecting suitable prequalification criteria to shortlist competent contractors and the role of these criteria in project success. However, very few studies have dealt with establishing hierarchy and investigating interrelationship among prequalification criteria. The rationale of this research is to unearth this seemingly unapparent relationship among these criteria through Interpretive Structural Modeling (ISM). The analysis reveals that financial capability and past performance of contractor, two of most commonly used criteria for contractor prequalification, are inadequate for competent contractor short-listing due to their strong dependence on other criteria. Based on the hierarchy developed in the model, it is suggested that criteria like environmental policy, litigation/blacklisting history and bid capacity of the contractor should be given higher importance by the clients. The findings may improve the prequalification process by assisting the clients in making informed decision regarding selection of prequalification criteria based on the hierarchy and classification established in the model.
Keywords: Prequalification Criteria; Contractor selection; Construction; Interpretive Structural Modeling (ISM); MICMAC.
INTEGRATED SUPPLY CHAIN MODEL FOR DETERIORATING ITEMS WITH LINEAR STOCK DEPENDENT DEMAND UNDER IMPRECISE AND INFLATIONARY ENVIRONMENT
by Ajay Singh Yadav, Anupam Swami
Abstract: In this paper, we develop an integrated supply chain model for deteriorating item, with linear stock dependent demand, taking into account the views of both the vendor and the multi-buyer under imprecise and inflationary environment. We have used the implicit cost in this model and use function principle to calculate the fuzzy total supply chain cost and Graded Mean Integration Representation Method is used to defuzzify the fuzzy total supply chain costs.
Keywords: integrated supply chain model; deteriorating item; linear stock dependent demand; inflationary environment; graded mean integration representation method.
Solving the problem of industry by formulating it as a capacitated transportation problem
by Kavita Gupta
Abstract: This paper presents the solution to the problem of the manager of a trading firm, D.M Chemicals, who deals in the trade of marble powder. The problem of the manager is to determine the quantity (in tons) of marble powder that the firm should purchase from different sellers and sell to the different buyers such that the total cartage and relative purchasing cost is minimized provided the demand and supply conditions are satisfied and the extra demand is also met during emergency situations. The problem under consideration is modeled as a linear plus linear fractional capacitated transportation problem with enhanced flow. The data is taken from the account keeping books of the firm. The solution so obtained by using the developed algorithm is compared with the existing data. Moreover, the solution obtained is verified by a computing software Excel Solver.
Keywords: capacitated; transportation problem; optimal solution; feasible solution; enhanced flow,related transportation problem; corner feasible solution.
Analyzing the European Unions Tenders Electronic Daily: Possibilities and Pitfalls
by Eric Prier, Palina Prysmakova, Clifford McCue
Abstract: As a public policy tool, the open data movement holds out hope of large payoffs in democratic accountability. This paper explores the efficacy of the Tenders Electronic Daily or TED open dataset which covers 33 European countries operating at numerous levels of government. While the recent move toward making the TED open data available in a potentially more user-friendly manner could have been a milestone in realizing a major aspect of the goals of the open data movement, this study demonstrates through numerous procurement examples that the structure of the individual files that comprise this complex dataset is extremely difficult to understand inrnits current form. Moreover, the transparency that may have resulted from this initiative is unlikely to efficiently serve the purposes of public procurement accountability. As a result, the TED open data in its current form should be approached with an abundance of caution.
Keywords: public purchase; e-government; transparency; large-scale dataset; contract award; contract notice.