Managing components for assemble‐to‐order products with lead‐time‐dependent pricing: The full‐shipment model

We study a component inventory planning problem in an assemble‐to‐order environment faced by many contract manufacturers in which both quick delivery and efficient management of component inventory are crucial for the manufacturers to achieve profitability in a highly competitive market. Extending a recent study in a similar problem setting by the same authors, we analyze an optimization model for determining the optimal component stocking decision for a contract manufacturer facing an uncertain future demand, where product price depends on the delivery times. In contrast to our earlier work, this paper considers the situation where the contract manufacturer needs to deliver the full order quantity in one single shipment. This delivery requirement is appropriate for many industries, such as the garment and toy industries, where the economies of scale in transportation is essential. We develop efficient solution procedures for solving this optimization problem. We use our model results to illustrate how the different model parameters affect the optimal solution. We also compare the results under this full‐shipment model with those from our earlier work that allows for multiple partial shipments. © 2007 Wiley Periodicals, Inc. Naval Research Logistics, 2007     

Optimal replacement of parts having observable correlated stages of deterioration

A single component system is assumed to progress through a finite number of increasingly bad levels of deterioration. The system with level i (0 ≤ i ≤ n) starts in state 0 when new, and is definitely replaced upon reaching the worthless state n. It is assumed that the transition times are directly monitored and the admissible class of strategies allows substitution of a new component only at such transition times. The durations in various deterioration levels are dependent random variables with exponential marginal distributions and a particularly convenient joint distribution. Strategies are chosen to maximize the average rewards per unit time. For some reward functions (with the reward rate depending on the state and the duration in this state) the knowledge of previous state duration provides useful information about the rate of deterioration.     

Approximation methods for the analysis of a multicomponent,multiproduct assemble‐to‐order system

In this article, we consider the performance evaluation of a multicomponent, multiproduct assemble‐to‐order (ATO) system. Each component is managed independently using a base‐stock policy at a supply facility with limited production capacity and an infinite buffer. The arrivals of demands follow a multivariate Poisson process and unfilled demands are backlogged. Because exact analysis of the proposed system is not feasible, we propose two approximation methods which provide upper and lower bounds for various performance measures such as fill rate, average waiting time, and average number of backorders of the proposed system. Our computational experiments demonstrate the effectiveness of the two approximation methods under various system settings. © 2011 Wiley Periodicals, Inc. Naval Research Logistics, 2011     

Capacitated selection problem

Optimizing the selection of resources to accomplish a set of tasks involves evaluating the tradeoffs between the cost of maintaining the resources necessary to accomplish the tasks and the penalty cost associated with unfinished tasks. We consider the case where resources are categorized into types, and limits (capacity) are imposed on the number of each type that can be selected. The objective is to minimize the sum of penalty costs and resource costs. This problem has several practical applications including production planning, new product design, menu selection and inventory management. We develop a branch‐and‐bound algorithm to find exact solutions to the problem. To generate bounds, we utilize a dual ascent procedure which exploits the special structure of the problem. Information from the dual and recovered primal solutions are used to select branching variables. We generate strong valid inequalities and use them to fix other variables at each branching step. Results of tests performed on reasonably sized problems are presented. © 1999 John Wiley & Sons, Inc. Naval Research Logistics 46: 19–37, 1999     

A bayes approach to quality control of an M/G/1 queue

This article provides a Bayes approach for the quality control of a production process which is defined by an M/G/1 queue. An inspection procedure which is jointly optimal from the queue's operational characteristics and quality-control perspectives is found using a queue-inspection renewal cycle analysis (with overall expected profit per unit time as the optimization objective). Numerical results are obtained, highlighting the relationships between quality control and (queue-like) production management.     

Guns for Butter? Empirical Evidence from China

Abstract

This study examines the causal nexus between defence spending and education expenditure in China using the bootstrap Granger full-sample causality test and sub-sample rolling window estimation. The full-sample result indicates that there is no causality between defence spending and education expenditure. By adopting a time-varying rolling window approach to revisit the dynamic causal relationships, this article identifies a negative unidirectional causality running from education expenditure to defence spending. The finding suggests that it is the education expenditure crowds out defence spending in China rather than reverse. No causality is demonstrated from defence spending to education expenditure, indicating that an increase in military spending will not crowd out expenditure on education. The results could be partly explained by that the education expenditure in China is below the requirement of corresponding economic growth, urging for more financial budget. Whereas the findings support a negative trade-off between defence and education expenditures, they refute the theory of ‘guns for butter’.     

An economic lot‐sizing problem with perishable inventory and economies of scale costs: Approximation solutions and worst case analysis

The costs of many economic activities such as production, purchasing, distribution, and inventory exhibit economies of scale under which the average unit cost decreases as the total volume of the activity increases. In this paper, we consider an economic lot‐sizing problem with general economies of scale cost functions. Our model is applicable to both nonperishable and perishable products. For perishable products, the deterioration rate and inventory carrying cost in each period depend on the age of the inventory. Realizing that the problem is NP‐hard, we analyze the effectiveness of easily implementable policies. We show that the cost of the best Consecutive‐Cover‐Ordering (CCO) policy, which can be found in polynomial time, is guaranteed to be no more than (4 + 5)/7 ≈ 1.52 times the optimal cost. In addition, if the ordering cost function does not change from period to period, the cost of the best CCO policy is no more than 1.5 times the optimal cost. © 2005 Wiley Periodicals, Inc. Naval Research Logistics, 2005.     

Scheduling patients in an ambulatory surgical center

This paper presents a deterministic approach to schedule patients in an ambulatory surgical center (ASC) such that the number of postanesthesia care unit nurses at the center is minimized. We formulate the patient scheduling problem as new variants of the no‐wait, two‐stage process shop scheduling problem and present computational complexity results for the new scheduling models. Also, we develop a tabu search‐based heuristic algorithm to solve the patient scheduling problem. Our algorithm is shown to be very effective in finding near optimal schedules on a set of real data from a university hospital's ASC. © 2003 Wiley Periodicals, Inc. Naval Research Logistics, 2003     

The selection allocation problem

The Selection Allocation Problem (SAP) is a single period decision problem which involves selecting profit‐maximizing (or cost‐minimizing) activities from various distinct groups, and determining the volume of those activities. The activities in each group are selected subject to the availability of that group's resource, which is provided by either pooling or blending raw inputs from several potential sources. Imbedded in the decision process is the additional task of determining how much raw input is to be allocated to each group to form the resource for that group. Instances of this problem can be found in many different areas, such as in tool selection for flexible manufacturing systems, facility location, and funding for social services. Our goal in this paper is to identify and exploit special structures in the (SAP) and use those structures to develop an efficient solution procedure. © 1999 John Wiley & Sons, Inc. Naval Research Logistics 46: 707–725, 1999