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31 October 2011, Volume 14 Issue 5 Previous Issue    Next Issue

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Analysis of Vendor Managed Inventory with the Involvement of Third-Party Logistics Wang Dao-ping, Zhao Yao，Wang Ai-xia, Yang Jian-hua 2011, 14 (5):  1-7.  Abstract ( 3085 )   Save This paper analyzes the limitations of vendor managed inventory (VMI) and shows that improvement can be made if the thirdparty logistics involve the inventory management. To analyze the effectiveness, based on the economic order quantity (EOQ), a mathematical model is developed to describe such an inventory management mode by taking the transportation cost and safety stock into account. With this model, analysis shows that the involvement of VMI by thirdparty logistics can reduce the suppliers inventory and logistics cost, and increase the profit of both the supplier and retailer. However, with the increase of the order, inventory, and logistics cost, the profit of both the supplier and retailer reduces. Examples are used to verify the results.〖WT5HZ〗Key  words： 〖WTBZ〗thirdparty logistics; vender managed inventory(VMI); economic order quantity(EOQ) References | Related Articles | Metrics

An Empirical Study on the Cooperative Effectiveness of Contracted Strategic Alliance Long Yong, Shi You-jun, Lai Xiao-xi, Gao Hui-pu 2011, 14 (5):  8-13.  Abstract ( 2999 )   Save The cooperation of a strategy alliance can be realized by designing appropriate contracts among the members in the alliance. The objective of this paper is to analyze how the contract design impacts the cooperation effectiveness. Based on the theory of trade cost economy (TCE), a related supply chain management (SCM) concept model is developed to describe the effect of the asset specificity and contract complexity on the alliance cooperation. Then, empirical analysis is carried out by using software packages SPSS15.0 and AMOS7.0. Results show that the higher the asset specificity is, the more the members in the alliance tend to have a complex business contract. Also, both the asset specificity and contract complexity have a significant effect on the performance and risk of the alliance. In this way, the results obtained in this paper reveal the governance mechanism of the contracted alliance cooperation. References | Related Articles | Metrics

The Dynamic Two-Dimensional Emergency Management under Emergency State in Supply Chain Lin Lue, Liang Hua-li, Cheng Yu-juan, Yu Hui 2011, 14 (5):  14-18.  Abstract ( 2943 )   Save  Emergency response is discussed when an emergency event happens in supply chain system. A manufacturer is the core of the supply chain considered in this paper. The concept of the degree of emergency response and dynamic management thinking is introduced. Then, a dynamic twodimensional emergency management model in supply chain is proposed. With this model, when an emergency event happens it can give an emergency level according to the different degree of emergency and use a corresponding coordination policy between manufacturers and suppliers by dynamic management. In this way, the cycle of stock can be shortened, the emergency cost can be reduced, and the normal operation of supply chain can be recovered as soon as possible. An example is presented to verify the proposed method. References | Related Articles | Metrics

On the Effect of Economic Policies on ClosedLoop Supply Chain with Manufacturer Collection Wang Lei1, Shi Cheng-dong2 2011, 14 (5):  19-23.  Abstract ( 3083 )   Save A closed-loop supply chain with the manufacturer collecting its endoflife products is considered. The issue discussed in this paper is how the economic incentive policies impact the performance of the supply chain. A game theory model is developed for such a supply chain under the centralized decision making mode. With this model, with the penalty factor as variable, analytical expressions are obtained to calculate the recycling rate, sale price, and the supply chain profit. Then, by sensitivity analysis, it is found that, for economic incentive of product recycling, there is a threshold in regulating the penalty factor. Based on the results obtained, revenuesharing contract is designed to coordinate the supply chain such that the profit is maximized. A numerical example is used to verify the results presented in this paper.  References | Related Articles | Metrics

Profit Distribution Mechanism for VMI Mode in the Upstream of Supply Chain Li Lei1, Yang Huai-zhen2 2011, 14 (5):  24-30.  Abstract ( 3333 )   Save The profit distribution issue is discussed for the upstream segment of a supply chain under vender managed inventory (VMI) mode. This segment of the supply chain includes a supplier and a manufacturer. In this part of the supply chain, there are three different environments in terms of the decision making: equal position for both the supplier and manufacturer, supplier predominating, and manufacturer predominating. With the transformation of ordering strategy and ordering cycle considered, mathematical models for different cases are developed to analyze the effect of VMI on the upstream of the supply chain. Then, the profit distribution mechanisms for the three different environments are analyzed. It shows that the supplier can increase prices in some extent to get more profit, while the manufacturer can reduce inventory cost so as to get more profit without increasing its product prices. Thus, winwin can be achieved and the VMI mode can be applied in the upstream of a supply chain. References | Related Articles | Metrics

Study on Entity Correlation Stability in Supply Chain Coordination Hu Hui, Hu Dawei, Chen Dong 2011, 14 (5):  31-35.  Abstract ( 3298 )   Save The entity correlation stability problem in supply chain coordination is studied. By analyzing the mechanism, rules of supply chain coordination, and entity relation in a supply chain, a dynamic nonlinear model is developed to describe the operations of a supply chain. Then, based on the model and Lyapunov exponent stability criteria, the supply chain stability analysis is performed. By simulation, the stability threshold of key parameters can be obtained. The proposed method and results obtained are helpful in operating a supply chain. References | Related Articles | Metrics

practice & application

Demand Disturbance Management with ScaleEconomyEffectDependent Production Cost in Supply Chain Shang Wenfang，Qi Ming 2011, 14 (5):  36-41.  Abstract ( 3716 )   Save The supply chain considered in this paper is composed of a supplier and a retailer. In such a supply chain, the unit production cost depends on scale economy effect and varies as the demands change. Study is conducted in this paper on  the disturbance management issue under centralized mode and the coordination mechanism  under decentralized mode. It is found that when the disturbance is small, a static production plan can be robust to the disturbance. However, when the disturbance is large, to coordinate the supply chain, the retailer should dynamically adjust the price and order quantity by changing the discount policies. A numerical example is used to verify the results obtained in this paper. References | Related Articles | Metrics

articles

Decision Model for Remanufacturing Reverse Supply Chain with Random Collection Quantity and Capacity Limitation Sun Hao1， Da Qingli2 2011, 14 (5):  42-46.  Abstract ( 3643 )   Save A remanufacturing reverse supply chain composed of one manufacturer and two collectors is addressed in this paper. It is assumed that the collection quantity is a random linear function of collection price and the facility capacities of the collectors or manufacturer are limited. We consider two cases: the collectors rent facilities or the manufacturer rents facilities. For such a supply chain, under Stackelberg game, we analyze the optimal collection prices for the collectors, the optimal buyback prices for the manufacturer, and the optimal facility capacities rented. Results show that the system is more profitable if the manufacturer rents facilities than the collectors rent facilities. This can be interpreted by the substitution effects which can reduce risks. References | Related Articles | Metrics

Reverse Logistics Network Design with Recovery Rate Taken into Account Liao Chenglin, Jiang Mingyuan 2011, 14 (5):  47-51.  Abstract ( 3116 )   Save In this paper, the design problem of reverse logistics networks for end-of-life product recovery is addressed with both logistics network operating cost and end-of-life product recovery rate taken into account. This problem is formulated as a multiobjective integer programming. By this model, it determines the number of recycling centers, the capacity level of each recycling center, the location of these recycling centers, and the area covered by each center. Also, it determines whether price subsidies should be given. Through the analysis of an example, it shows that the proposed method can present how the cost changes when the recovery rate increases. With the proposed method, one can know how the recovery rate can further increase at different recovery rate levels. References | Related Articles | Metrics

Integrated Risk Management for EPC Projects Yang Bao-chen，Chen Yue 2011, 14 (5):  52-57.  Abstract ( 3213 )   Save Risk management is an important issue for engineering, procurement, and construction (EPC) projects. In considering the risks at different phases for such projects, dynamic risk management modules and evaluation index systems are presented. Then, an integrated risk evaluation method is proposed by integrating Delphi, fuzzy analytic hierarchy process (FAHP), risk matrix method, and fuzzy comprehensive evaluation model. With this method, risk can be evaluated in both qualitative and quantitative ways. Furthermore, risk management process for EPC projects is given. Based on the proposed method, an integrated risk management system for EPC projects is developed. A case study is presented to show the effectiveness of the proposed method. References | Related Articles | Metrics

Real Option Valuation of the Patent under Competition Cheng Yi, Zhou Zhuohua 2011, 14 (5):  58-61.  Abstract ( 2915 )   Save Traditional methods of patent pricing do not consider real option valuation of the patent，leading to the undervaluation of the patents. However, now, the research that applies real option to patent pricing does not consider the impact of rivalry entry on the value of patent option, leading to the overvaluation of the patents. In order to price patents accurately, in considering the effect of rivalry entry on the value of patent option, a real option approach for patent pricing is proposed. This method is applied to analyze the patent pricing with technological progress considered and with technological progress not considered, respectively, for comparison. Also, with competition and without competition, the valuation of patent real option is analyzed. Results show that, in considering the technology progress, the proposed method can accurately price the value of patents. References | Related Articles | Metrics

InterceptBased Performance Evaluation of Operation Characteristic Curve in Product Quality Inspection FaFan Shuhai1, Cai Hong1, Wang Yuqian1, Amanda Elizabeth2, Shao Jianfeng1 2011, 14 (5):  62-65.  Abstract ( 4172 )   Save The operation characteristic (OC) analysis is one of the most important issues in product quality inspection. However, there is no quantitative evaluation index system for the OC analysis in the sampling analysis process. Thus, the existing methods for product quality inspection are suitable for onefactor analysis only. In this paper, a novel performance evaluation index system for the OC curve is proposed. It is called interceptbased index system, because the intercept on the OC curve is used to characterize the product quality. By this method, the OC can be evaluated quantitatively and sensitivity analysis becomes possible. Furthermore, it can deal with multivariable analysis. The proposed method is implemented and shown to be effective. References | Related Articles | Metrics

Modeling and Analysis of Recycling and Remanufacturing Systems by Using Repeated Game Model Guo Yuehong1,2， Ma Junhai1,2， Wang Guanhui1 2011, 14 (5):  66-70.  Abstract ( 3555 )   Save Recycling and remanufacturing are effective way for rational use of the resources and environmental protection. To make recycling and remanufacturing possible, the recycling and remanufacturing system should be profitable. A repeated game model is developed to describe such a system. By using this model, one can analyze the relationship between the marginal profit and the recycling price which is the decision variable in the model. With this model, numerical simulation is performed and results show that: 1) when the price is adjusted for the profit, the larger the adjusting range of the price is, the more complex the recycling market chaotic state is; 2) when the price of the remanufactured products exceeds a critical value the recycling market enters a chaotic state; and 3) the recycling market is sensitive to the initial recycling price, a minor change of initial recycling price can cause a large fluctuation of the recycling market. These results can be used as the guideline for profit maximization in recycling and remanufacturing. References | Related Articles | Metrics

Simulated Annealing Algorithm for Vehicle Routing Problem with Three Dimensional Loading Constraints Peng Bitao1,2, Zhou Yongwu1 2011, 14 (5):  71-74.  Abstract ( 3022 )   Save In the classical vehicle routing problem, it considers the goods weight constraint only，but ignores other loading constraints, such as the loading space constraint. In this paper, the vehicle routing problem with threedimensional loading constraint taken into account is addressed. A heuristic is proposed for goods loading such that the three dimensional loading constraint is satisfied and optimized. Then, based on the heuristic, a simulated annealing algorithm is presented to solve the problem. A number of benchmark problems are used to test the proposed method. Results show the algorithm is effective. References | Related Articles | Metrics

Optimization Design of an EWMA Control Chart for NonNormal Data based on Taguchis Loss Function Xue Li 2011, 14 (5):  75-78.  Abstract ( 3040 )   Save The optimization design of Exponential Weighted Moving Average(EWMA) control chart for nonnormal data is addressed. A method that combines Taguchis loss function and the probability distribution of the random process mean shift is proposed. By using the Burr distribution to approximate various nonnormal distributions, the parameter of the EWMA control chart for nonnormal data is determined through minimizing the overall mean value (ML) of Taguchis loss function. Comparative studies show that the proposed MLEWMA control chart for nonnormal data is significantly superior to the statistical EWMA control chart for nonnormal data in terms of the overall loss of ML. References | Related Articles | Metrics

An Interception Flow Location Model with Lower Demand Bound Constraint under Stochastic Demands Shi Hong-wei1, Ma Chao1, Wei Li2 2011, 14 (5):  79-83.  Abstract ( 3026 )   Save Often it requires a lower demand bound to build a service node. Based on this requirement, this paper discusses the interception flow location problem with lower demand bound constraint considered. By presenting a utility function of customer demands, the stochastic distribution characteristics of customer flows is analyzed and the intercepted distribution of the customers of each service node is given. Then, a flow interception location model with lower demand bound constraint is presented by analyzing the operation constraints of the node facility. A case study is given to verify the application of the proposed model. Result shows that, by the estimation and optimization of the lower demand bound and its satisfied probability for each service node, the proposed model can help the stakeholders to solve the location problem and obtain the largest return. References | Related Articles | Metrics

Cell Formation in Cellular Manufacturing with Human Operator Learning Considered Lai Qinglei， Fan Jiajing， Feng Dingzhong 2011, 14 (5):  84-88.  Abstract ( 3140 )   Save Cell formation is the critical issue in cellular manufacturing (CM). Traditionally, cells are formed based on the partmachine relation and it considers no human operation. However, in practice, the operation effectiveness of different operators is different because of the different learning effectiveness. In this paper, cell formation problem is studied with human operator learning considered. An integer programming model by combining human operator learning curve is proposed for the cell formation problem. Then, the genetic algorithm (GA) is used to solve the problem. By this method, it not only assigns the parts into appropriate cells, but also assigns the operators into appropriate machines. In this way, the performance of the CM system is significant improved. References | Related Articles | Metrics

Matrix Circle Intelligent Algorithm for the Traveling Salesman Problem Pan Tao, Li Yueyu, Chen Wengui 2011, 14 (5):  89-91.  Abstract ( 2832 )   Save  In this paper, the concept of weighting distance matrix is presented. Then, method is given to calculate the weighting distance matrix. Based on this concept, a novel algorithm called matrixcircle intelligent algorithm is proposed to find an approximate solution of the traveling salesman problem. This algorithm finds a circuit by using the characteristics of the weighting distance matrix. This circuit is unremittingly improved and updated until a satisfied solution is found. A number of examples from the library of TSPLIB are used to test the proposed algorithm and results show that it is very effective. References | Related Articles | Metrics

practice & application

Improvement of the Production Line of a Motorcycle Engine based on Timer Pro Zhang Xiaodong1， Zhao Dongfang1， Xie Xunde2，Yu Tian2 2011, 14 (5):  92-97.  Abstract ( 3397 )   Save  In redesigning an existing production line, a great deal of data should be collected and processed. Often data are collected and processed manually, which is cumbersome with low efficiency and uncertain quality. In taking the advantage of efficient data collecting and processing provided by Timer Pro, the software Timer Pro is applied to the redesign of an existing production line of a motorcycle engine. Based on the data collection and processing, standard operation times are set and the process is optimized. Simulation by using platform Flexsim is used to check the performance of the redesigned line. Results show that the productivity is significantly increased while the number of operators for the line is reduced. Also, the redesigned production line has the capability for multiproduct and smallbatch production. References | Related Articles | Metrics

A Study of the Overall Effectiveness of Equipment in Solar Battery Production System Hong Yue, Yu Qian, Jin Shiliang, He Wenzhong 2011, 14 (5):  98-103.  Abstract ( 3367 )   Save In this paper, the improvement of an existing solar battery production system is discussed, as a case study. It is known that overall equipment effectiveness(OEE) is a metric for a manufacturing enterprise to measure the performance of a single set of equipment, by which to improve its effectiveness. However, it is insufficient to measure the effectiveness of only one set of equipment in a production line. An analysis of the solar battery production system, which consists of several sets of equipment, is conducted by integrating the OEE, overall throughput effectiveness(OTE), and theory of constraint(TOC). The OTE and OFE are calculated in the solar battery production system and the bottleneck is identified. Upon the analysis, five feasible solutions are proposed for the improvement of the production system. By simulation with software WITNESS, one of the solutions is selected and the performance of the system is significantly improved. References | Related Articles | Metrics

GA Based Multi-objective Optimization of Workshop Layout Zhou Na, Xu Ke-lin, Guo Shuang 2011, 14 (5):  104-109.  Abstract ( 3499 )   Save Shortcomings of using singleobjective optimization to solve the job shop multirow facility layout problem are analyzed. With this in mind, multiobjective optimization for job shop multirow facility layout problem is discussed. A multiobjective combinatorial optimization model with both material handling cost and space utilization considered is developed. Then, a modified genetic algorithm (GA) is proposed to solve it. The encoding, reproduction, and fitness functions are well designed for all three situations: automatic newrow layout, tworow layout, and threerow layout. A case problem from the industry is presented to show the application of the proposed method. With coding by Matlab, performance is compared with that obtained by singleobjective methods. It shows that it outperforms the singleobjective methods in applicability and computational efficiency. References | Related Articles | Metrics

Scheduling Algorithm for Automated Mixed Production Line with Time Window Constraint Lei Weidong, Che Ada 2011, 14 (5):  110-115.  Abstract ( 3650 )   Save  The scheduling problem for a class of automated mixed production line with time window constraint is discussed. For such a system, it should sequence both the jobs and the robot movements. Based on a systematic analysis, in considering time window constraint on job processing times, robot availability constraint, and resource capability constraint, the problem is formulated as a mixed integer programming model. Then, the commercial software CPLEX is used to solve it. Computational results on benchmark and randomly generated instances show that the proposed MIP approach is very efficient in scheduling the automated mixed production line. References | Related Articles | Metrics

Application of IE Technologies to the Business Process Reengineering of a Forwarder Yue Hong，Chen Jun 2011, 14 (5):  116-120.  Abstract ( 3339 )   Save  The business process reengineering issue for a forwarder is studied in this paper. Traditionally, a customer order is processed with the outofdate way by just one person from the beginning to the end through the whole business process, leading to low productivity and low service quality. A number of industrial engineering (IE) technologies are used to analyze this process. Based on the analysis, the business process is reengineered. The new process is divided into two parts: the front and back ends. In the former, it provides customized service. In the latter, the business process is standardized, and tasks are clearly identified and described. Then, work study is conducted to eliminate redundancy tasks. To support the operation of the new process, the management information system is updated. As a result, both work efficiency and customer satisfaction are significantly improved. References | Related Articles | Metrics

Six-Sigma-Based Rapid Changeover of Different Products in Electronic Product Manufacturing Wang Lingling， Mao Jianmin， Chen Yuxiao 2011, 14 (5):  121-124.  Abstract ( 2830 )   Save Multiple electronic products were manufactured on an existing production line in a company. The changeover time was long, resulting in low productivity. To increase the productivity, six-sigma is used to analyze the production process, workers’ operations, tools used, and task times. Based on the analysis, the production process and the tools used are redesigned, and the workers’ operations and task times are standardized. Further, visual management is realized by using Kanban. In this way, the changeover time is significantly reduced and the productivity is significantly increased. References | Related Articles | Metrics

GIS-Based Decision Support System for Supermarket Location Li Hengkai， Liu Jiabing， Pan Yinglong 2011, 14 (5):  125-129.  Abstract ( 3401 )   Save It needs to process a great deal of gray information in the supermarket location and there is no effective software tool to do so. Thus, often this location decision is made based on the human preference and it is more subjective than objective. A model is presented for the supermarket location problem by combining geographic information system (GIS) with gray system theory such that the gray information can be effectively processed. Based on this model, a decision support system is developed. Besides the effectiveness of the system in locating a supermarket, it is used friendly and easy to use. A case study is presented to show the application and effectiveness of the system. References | Related Articles | Metrics

Study on the Transfer Pricing in General Contractor for Efficiency Improvement Guan Baihai  2011, 14 (5):  130-135.  Abstract ( 3674 )   Save Aiming at increasing the efficiency of the different subsidiary companies in a general contractor, the transfer pricing method with costs and profit sharing is proposed. A model that describes the profit of the different subsidiary companies in the general contractor is proposed. Based on the model, analysis is carried out. Results show that, to increase the efficiency, the headquarters of the general contractor should distribute less profit into the subsidiary companies. The appropriate proportion of profit distributed to the company for design called Company #1 or the construction company called Company #2 should be determined by the cost and efficiency coefficients. Also, the profit distributed to Company #1 and Company #2 should be proportional to the effort made in the design and construction, and the efficiency, and is inversely proportional to the square of its cost coefficient. References | Related Articles | Metrics

Simulation Study on Worker Assignment Policy for Minimum Cycle Production System with Workers’ Learning-Forgetting Considered Guan Shihua1,2，Ye Xiaomei1，Liu Huizhen3,Liao Zhaohui3 2011, 14 (5):  136-141.  Abstract ( 3502 )   Save There are intrinsic differences among workers in production system. Workers have different experience, knowledge, and different rates of learningforgetting, which greatly affects the performance of a production system. In this paper, in considering workers’ learningforgetting, a mathematical model of workeroperation assignment to achieve a minimum cycle time is presented. By this model, a steady state workeroperation assignment solution can be obtained with the workers’ professionals. Based on the model, simulations are performed under given particular production environment for heterogeneous workers for specific objectives. It shows that good results can be obtained by using the proposed method. References | Related Articles | Metrics

Empirical Analysis of Relation Between Cause-Related Marketing and Performance of Hi-Tec Corporations in Pearl River Delta Tang Genghua，LiuYanming， Tai Qinglei 2011, 14 (5):  142-145.  Abstract ( 3060 )   Save  The effect of causerelated marketing on the performance of HiTec corporations in the Pearl River Delta is addressed in this paper. To do so, a factor analysis model is developed for the problem and an index system is built for performance evaluation. Data are collected in the HiTec corporations in the Pearl River Delta by using questionnaire. Based on the model and the data collected, analysis is carried out. Results show that causerelated marketing has a positive effect on the performance of the HiTec corporations in the Pearl River Delta. References | Related Articles | Metrics

An Empirical Study on Relationship Between Regional Logistics Development and Regional Economy in Jiangsu Province He Ping, Zhang Guangming 2011, 14 (5):  146-149.  Abstract ( 2912 )   Save By using the methods of augment dickey fuller (ADF) and cointegration tests, this paper conducts a comprehensive study on cointegration relationships between regional economic indicators and regional logistics demands in Jiangsu province. The causal test of regional economic indicators and regional logistics demand indicators is made to reflect their cointegration relationship. Then, the causal relation types are defined. In this way, it identifies the regional economic development indicators that promote the regional logistics demands in Jiangsu province. These indicators include regional GDP, GDP of the primary industry, GDP of the secondary industry, the total fixed asset investment, the total retail sales of consumer goods, and income per capita. References | Related Articles | Metrics

general review

A Review of Research on the Dynamics and Complexity of Supply Chain Systems Wang Wen, Fu Weiping  2011, 14 (5):  150-156.  Abstract ( 3244 )   Save  In the design, analysis, optimization, and management of supply chains, it pays more and more attention to the dynamics and complexity of a supply chain system, since the dynamics and complexity increasingly impact the performance of a supply chain system. The researchers in the different fields in supply chain research concern only some aspects of the dynamics and complexity, but do not analyze the dynamics and complexity, and their relationship in a more extensive view. Up to now, there is no comprehensive literature review in this field. In this paper, a literature review is given to present the research advancement and the framework of research on the dynamics and complexity in supply chain systems. In this way, we try to provide an overview of the research in this field. References | Related Articles | Metrics