Supply Chain Engineering

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1 Alexandre Dolgui Jean-Marie Proth Supply Chain Engineering Useful Methods and Techniques 4Q Springer

2 1 Introduction to Pricing Introduction Definitions and Notations High- and Low-price Strategies Adjustable Strategies Market Segmentation (or Price Discrimination) Strategy Discount Strategy Price Skimming Penetration Pricing Yield Management (Revenue Management) Margin, Price, and Selling Level Notations Basic Relation Equilibrium Point Items Sold with Regard to Price (Margin Being Constant) Price Versus Sales Volume: the Selling Curve Introduction Cost-plus Method Price Testing Estimation Made by Experts Market Analysis Customer Surveying.' Conjoint Measurement Introduction and Definitions Profile Method Two-factor Method Clustering for Market Segmentation Price Strategy in Oligopoly Markets Reactions of Competitors Decreasing Prices Increasing Prices Conclusion 37 References 38 Further Reading 38

3 xii 2 Dynamic Pricing Models Introduction Time-dated Items: a Deterministic Model Problem Setting Solving the Problem: Overall Approach Solving the Problem: Example for a Given Price Function Remarks Dynamic Pricing for Time-dated Products: a Stochastic Model Problem Considered Solution to the Problem Probability for the Number of Items at a Given Point in Time Remarks Stochastic Dynamic Pricing for Items with Salvage Values Problem Studied Price as a Function of Inventory Levels: General Case Price as a Function of Inventory Levels: a Special Case Concluding Remarks 75 Reference 75 Further Reading 75 3 Outsourcing Introduction Outsourcing Process Vendor Selection and Evaluation Model Model Formulation Solution Approaches Strategic Outsourcing CaseD o,o<d u Case D M < D o, o Pros and Cons of Outsourcing.../ A Country of Active Offshore Vendors: China Recent History Consequences Chinese Strategy to Acquire Know-how and Technology Offshore Outsourcing: a Harmful Strategy? Introductory Remarks Risk of Introducing Innovations Abroad How Could Offshore Outsourcing Be Harmful to Some Groups? How Could Offshore Outsourcing Be Harmful to a Country? How Could Offshore Outsourcing Be Harmful to the World? Conclusion 106 References 107 Further Reading 107

4 xiii 4 Inventory Management in Supply Chains Introduction Inventories in Supply Chains Definition of a Supply Chain Inventory Problems in a Supply Chain Bullwhip Effect Stochastic Inventory Problems Newsvendor (or Newsboy) Problem Finite-horizon Model with Stochastic Demand (R, Q) Policy (s, S) Policy Echelon Stock Policies Introductory Remarks Material Requirements Planning (MRP) Manufacturing Resources Planning (MRP2) Production Smoothing: Lot-size Models Discrete Monoproduct Problem Continuous Monoproduct Problem Multiproduct Problem Economic Order Quantity (EOQ) Pull Control Strategies > Kanban Model Base Stock Policy Constant Work-in-progress (CONWIP) Generalized Kanban Extended Kanban Conclusion 157 References 158 Further Reading Radio-frequency Identification (RFID): Technology and Applications Introduction Technical Overview Global Description Properties Parameters of Importance when Selecting Tags Auto-ID Center at MIT Succinct Guideline for RFID Deployment Choice of the Technology Analysis of Problems that May Happen Matching RFID with IT RFID Applications 171

5 xiv Application to Inventory Systems RFID Systems in Supply Chains Various Applications Related to Movement Tracking Some Industrial Sectors that Apply RFID Retail Industry Logistics Pharmaceutical Industry Automotive Industry Security Industry Finance and Banking Industry Waste Management Processed Food Industry Advantages when Applying RFID Technology to Supply Chains Expert Opinion on the Matter Economic Evaluation of the Use of RFID in Supply Chains Current Situation How to Proceed? Privacy Concerns Main Privacy Concerns How to Protect Privacy? Authentication Conclusion 191 References 192 Further Reading X-manufacturing Systems Introduction Mass Production Flexible Manufacturing Systems (FMS) What Does Flexibility Means? Definition of FMS Advantages and Limitations of FMS Agile Manufacturing Systems (AMS) Definition Agile Versus Lean Agile Versus Flexible Cost Stability During the Life of an AMS Reconfigurable Manufacturing Systems (RMS) Motivation RMS Definition Reconfiguration for Error Handling A Problem Related to RMS Lean Manufacturing Systems (LMS) Definition 218

6 xv How to Eliminate Wastes? Six Core Methods to Implement Lean Manufacturing Conclusion 233 References 234 Further Reading Design and Balancing of Paced Assembly Lines Simple Production Line (SPL) and Simple Assembly Line (SAL) Simple Assembly Line Balancing (SALB) Problems ALB Common Sense Approach COMSOAL Algorithm Improvement of COMSOAL RPW Method Kilbridge and Wester (KW)-like Heuristic Branch and Bound (B&B) Approaches 251, Mathematical Formulation of a SALB-1 Problem Problem SALB Heuristic Algorithm Algorithm Based on Heuristics for SALB Mathematical Formulation of Problem SALB-2 X., Using Metaheuristics Simulated Annealing Tabu Search Genetic Algorithms Properties and Evaluation of a Line-balancing Solution Relationship Cycle Time/Number of Stations/Throughput Evaluation of a Line-balancing Solution Concluding Remarks 273 References.A 274 Further Reading Advanced Line-balancing Approaches and Generalizations Introduction Single Type of Product and Triangular Operation Times Triangular Density of Probability Generating a Random Value Assembly-line Balancing Particular Case: Gaussian Operation Times Reminder of Useful Properties Integration Using Tchebycheff s Polynomials Algorithm Basis Numerical Example Mixed-model Assembly Line with Deterministic Task Times 290

7 xvii 10 Manufacturing Layout Introduction Static Facility Layouts Basic Layout Models Selection of a Type of Layout Layout Design Design of Manufacturing Entities Location of Manufacturing Entities on an Available Space Layout Inside Manufacturing Entities Balancing of the Manufacturing Entities Facility Layout in a Dynamic Environment Changes in the Needs of Manufacturing Systems Robust Layouts Dynamic Facility Layout Conclusion 414 References 415 Further Reading Warehouse Management and Design Introduction Warehouse Types and Usefulness > Warehouse Taxonomies Warehouse Usefulness Basic Warehousing Operations Receiving Storage Automated Systems Warehouse Management Warehouse Functions Warehouse Management Systems (WMS) Design: Some Remarks Warehouse Overview Storage in Unit-load Warehouse Warehouse Sizing Warehouse-location Models Introduction Single-flow Hierarchical Location Problem Multiflow Hierarchical Location Problem Remarks on Location Models Conclusion 445 References 445 Further Reading 446

8 xviii A Simulated Annealing 449 B Dynamic Programming 459 C Branch-and-Bound Method 483 D Tabu Search Method 503 E Genetic Algorithms 519 Authors' Biographies 531 Index 533