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Despite the various technical solutions for making lighting ‘smart,’ today’s lighting systems are often kept simple, and they are frequently not adjusted to user behaviours. This is especially the ...

Environmental issues, mainly greenhouse gas (GHG) emissions, are in large part the result of the excessive use of energy in production systems. The scarcity of resources, governmental regulations, and public awareness about sustainability make them expensive for companies. The speed of producing items (production rate) impacts GHG emissions generation in manufacturing, i.e., usually faster production results in more emissions, which is controllable in many cases. The production rate also affects the process quality and reliability; i.e., fast production speeds deteriorate the system fast, resulting in reworking defective items and machine failure. Such quality and reliability issues increase energy consumption and subsequently costs. This paper develops two-level (vendor-buyer) supply chain models that tackle these issues. It considers two coordinated policies: classical and vendor-managed inventory with consignment stock (VMI-CS), where the objective is to find the values of the decision variables that yield the minimum total supply chain cost. It includes the costs of holding inventory, GHG emissions and tax, energy usage, product and process quality, and transportation operations. The decision variables are the order quantity, the number of shipments, and the production rate. The paper compares the numerical results of the two coordination policies. It also provides managerial insights on the economic and environmental performance of the supply chains.

Additive Manufacturing (AM) is a recent and rapidly developing technology, which has brought about significant disruptions in the manufacturing arena. To capture the full spectrum of changes resulting from AM's introduction into the industry, it is not sufficient to look at it just as a disruptive set of technologies but, rather, take a system's approach. It must be noted that the investigation of AM's impacts cannot be limited to an individual actor, but should encompass the whole supply chain to fully consider the relevant changes in strategic as well as tactical decision-making and operations. This paper presents an analytic approach based on Joint Economic Lot Sizing model, and aims at capturing the most significant impacts resulting from the implementation of the AM concept on a two-level supply chain. This assessment of AM from inventory and logistics standpoints is targeted at providing insights into how manufacturers could adapt their supply chains’ planning to accommodate new paradigms in...

Incorporation of quality and environmental concerns in production and inventory models has received considerable attention in the inventory management literature; however, researchers studied these...

This paper presents two models (classical and VMI-CS coordination) for a two-level closed-loop supply chain with a manufacturer and a retailer with a facility to remanufacture used items. The paper considers three critical environmental issues, which are the energy used in production (manufacturing and remanufacturing) processes, GHG emissions from production and transportation activities (subject to a penalty tax), and the number of times to remanufacture (recover) a used item. Numerical results show that the traditional optimization approach, which minimises the sum of inventory related costs, suggested less remanufacturing, fewer recovery times and more GHG emissions and energy usage; a result of operating at high production rates. The VMI-CS model was shown to be more economical than the classical model for a wide range of manufacturing rates, but not necessarily a more environmentally responsible choice. An extensive numerical analysis was conducted to enrich the discussion and to draw some managerial insights on how to make environmentally conscious decisions.

One of the celebrated extensions of the economic order/production quantity (EOQ/EPQ) model is one that assumes a received shipment contains a fraction of imperfect (non-conforming) quality items, where these items, detected by 100% screening, are sold as a single batch at a discounted price. This paper revisits this model (Salameh and Jaber, 2000, Int. J. Prod. Econ. 64 (1), 59–64) and extends it by assuming that a shipment is coming from a distant supplier and, therefore, it is not feasible to replace the imperfect items with an additional order to the same supplier. To address this restriction, two models are presented. The first assumes that imperfect items are sent to a repair shop who charges a cost plus a markup margin, while the second model assumes that imperfect items are replaced by good ones from a local supplier at a higher cost. The inventory environment assumed in this paper is relevant in todays globalised supply chains, thus practical implications of the problem faced are discussed. Numerical results are also presented and discussed. The results show that there exists a threshold value of the unit purchase cost of an emergency-ordered item and a fraction of defectives to which it is decided to either buy or repair.

The greatest part of literature on inventory models deals with items that preserve their value over time or at least, deteriorate over time. This paper focuses on a special class of items (defined as 'maturing/ageing items') characterised by the increase of their value over time, when appropriately stored: e.g., items which improve their organoleptic and tasteful characteristics over time. The cases which inspired the present contribution belong to food production and supply, as in the case of matured cheeses (e.g., the well known Grana Padano), aged red wines (e.g., the well known Barolo) and aged spirits that, once bottled, acquire value over time. However, other types of products characterised by a 'maturing/ageing' process could be further identified. The present study introduces and discusses the inventory problem for this class of items, highlighting its peculiarities and its most relevant features. So as to focus on the several and attractive aspects which characterise the problem considered, an illustrative model is presented, with the aim of identifying the optimal maturing/ageing period.

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

The paper considers two research issues that usually interact in practice, which are the ‘VMI with consignment’ inventory policy and the ‘Learning Curve’. Under a VMI with consignment agreement, the vendor is the one who manages the buyer's inventory, and he holds the property of the inventory until the withdrawal of the buyer: this practice also offers to the vendor the possibility of revising its production plans and shipments according to alternative policy also exploiting the opportunity offered by learning in production. The paper, which considers a two-level supply chain system with a single-vendor and a single-buyer at each level, investigates and compares different policies that the vendor may adopt to exploit the advantages offered by the VMI with consignment agreement when the vendor's production process is subject to learning effects. The main result of the study is to show how learning in production can give flexibility to the supply chain stake holders in assigning the size and the time of each shipment.

This paper presents a model for the evaluation of the environmental impacts associated with the management of cold supply chain, considering transport and storage activities. A novel portable refrigerated unit (PRU) for the management of goods along the cold chain is presented, and its performances, in terms of emissions at different distribution stages, are compared to those of traditional cold chain equipment. A mathematical model based on costs and environmental impacts has been developed. Moreover, a case study is presented so as to show the usefulness of the model proposed. Numerical analyses are provided in order to demonstrate the efficiency of the new equipment, compared to the traditional refrigeration technology involved in distribution chains. Environmental benefits and efficiency of the new equipment are considered, as well as energy consumption reduction. The proposed system may help companies to pursue more sustainable practices in their cold chain activities.

This article focuses on decoupling point and inventory policy decisions in manufacturing companies supplying products with different demand patterns and customisation levels. In such a context, adopting a pure make-to-order (MTO) approach may severely affect the response time for standard and regular products while, on the other hand, a pure make-to-stock (MTS) policy may result in excess inventory. To overcome this, companies tend to adopt hybrid and dynamic MTO–MTS policies, but decisions are often taken without the support of a rational model. In this article we develop a rational model to support inventory management decisions in a MTO–MTS context and bridge the gap between theory and practice. Starting from a real-life case study, we develop a decision-making approach that employs simple models, methods and tools, thus making it suitable for practical implementation in small and medium sized enterprises (SMEs). Different product characteristics are analysed in order to develop a framework for choosin...

In recent years, companies have strengthened their supply agreements, and even the management of their inventories. To this aim, vendor-managed inventory (VMI) represents an interesting approach to stock monitoring and control, and it has been progressively considered and introduced in several companies. The research proposed investigates the way how a particular VMI policy, known as Consignment Stock (CS), may represent a successful strategy for both the buyer and the supplier. The most radical application of CS may lead to the suppression of the vendor inventory, as this actor uses the buyer's warehouse to stock its finished products. As a counterpart, the vendor will guarantee that the quantity stored in the buyer's warehouse will be kept between a maximum level and a minimum one, also supporting the additional costs eventually induced by stock-out conditions. The buyer will pick up from its store the quantity of material needed to meet its production plans and the material itself will be paid to the buyer according to the agreement signed. In previous studies, Braglia and Zavanella [2003. Modelling an industrial strategy for inventory management in supply chains: The ‘Consignment Stock’ case. International Journal of Production Research 41, 3793–3808] developed an analytical model of the CS policy, referring to a single-vendor and single-buyer situation. The same authors presented a comparison with the optimal solution available in the literature (in particular, with reference to Hill's model [1997. The single-vendor single-buyer integrated production-inventory model with a generalised policy. European Journal of Operational Research 97, 493–499]). The analytical results obtained allow the identification of the benefits and profitability that the CS approach determines in environments affected by uncertain demand. In order to understand the potential benefits of the CS policy, an analytical model is offered with reference to the interesting industrial case of a single-vendor and multiple-buyer productive situation, thus obtaining the optimal replenishment decisions for both the vendor and buyers in such a situation. The results show how the CS policy works better than the uncoordinated optimisation.

This paper originated from an industrial case study in the field of the aluminium supply chain. In particular, the most original aspects of the study are linked to the use of an alternative supply method for raw material (aluminium) in manufacturing. This method consists in the possibility of the company receiving the aluminium alloy from its supplier (refiner and remelter of secondary aluminium) in the liquid phase, as an alternative to the traditional supply of solid material. This practice has been possible by the use of special ladles, transportable by truck and moved within factories, thanks to specially equipped overhead bridge cranes. The supply of molten metal represents a substantial benefit for the whole supply chain, because of the energy savings implicit in the method itself (i.e. both energy and time can be saved when melting the metal at the company furnaces). Moreover, the study integrates the concerns about transport pollution, addressing the topics of a green supply chain problem and incorporating the environmental aspects in its analytical description. Therefore, the study proposes a model to evaluate the economic and environmental effects of the industrial practice described. The result of the model is the determination of the supply aluminium mix, i.e. molten and solid alloy, capable of balancing the economic benefits (highest scrap values, lowest total costs, etc.) as well as environmental requirements (least pollution).

Production systems are usually organised in departments consisting of machines, each one characterised by specific patterns of energy demand over time. This work proposes an analytical approach, based on the application of Queuing Theory, to model the power request and the consequent energy use in a production system. Despite the industrial context addressed, the model may be easily applied to small units (e.g., civil buildings) and other energy sources (e.g., thermal energy), thus giving more relevance to the approach proposed. The model can efficiently support green-field cases, particularly avoiding or integrating the traditional assumptions, such as load and coincidence factors (usually employed to determine the contractual electrical power), which provide a static view of the power needs of the system. In fact, the proposed queuing model considers the arrivals as the statistical distribution of the switch-on of machines and service completions as the statistical distribution of the processing times at the machines themselves, thus offering a dynamic view of the power loads. Therefore, the model may be helpful while assessing the contract with the energy supplier or planning the production schedule of plants with significant energy-related constraints, including plant services. A numerical example shows the application of the proposed approach and its results are compared to those determined by the traditional design methodology.

This paper presents a vendor-managed inventory (VMI) with consignment stock (CS) policy applied to the integrated vendor–buyer system, where the demand at the buyer side is stock dependent. Under the VMI with CS, the vendor manufactures a product and delivers it in batches of equal sizes to the buyer: although the goods are in the warehouse of the buyer, they remain to be the property of the vendor until the buyer registers a withdrawal. The products delivered are presented to the end customers in a display area and the demand is assumed to be positively dependent on the number of items displayed. Moreover, the model proposed considers that the product display area is replenished once its inventory level hits a given minimum. The paper investigates and compares different policies that may be adopted to exploit the advantages offered by the consignment stock agreement when stock dependent demand at the buyer side is considered.

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

The paper discusses the layout problem for a productive environment affected by variability of demand (dynamic environment). A conceptual framework of the layout flexibility is discussed, according to the concept of layout robustness. An analytical approach extends the technique adopted for the optimal layout determination from the static to the dynamic context. For an assigned layout problem, an example shows how the analytical approach may be applied to the calculation of the probability distribution of the cost function. From this basis, a measure of the layout robustness is proposed and commented on, in order to give useful advice to those in charge of layout planning and control and to highlight the potential use of the theoretical issues discussed.

The study originated from an industrial case study in the field of steel production, but it presents a larger interest, as many other manufacturing fields have similar concerns (e.g. foundries, food, textile and paper industries). A significant phase of steel manufacturing is the product cooling (likewise, drying in paper and textile production, or maturing in food production). This phase may be completed in different ways, but (1) it must be carried out in the finished product warehouse and (2) it must meet both production optimisation and customer needs. The latter requirement acquires a strategic relevance in JIT environments. The present study proposes a mathematical model to find the optimal production schedule of steel billets, based on the relevant parameters of the productive system (set-up and processing times, demand profile). In the industrial case examined, the negative impact of holding costs on cash flows is also linked to the space required by the cooling process, which depends on the production schedule adopted. In other words, the finished product storage can be considered a part of the manufacturing cycle and impacts on it. In the case of steel plants operating in JIT environments, the warehouse must be promptly emptied and carefully managed to exploit the available space. Thus, the effect of inventory costs is examined in a production–inventory system with finite capacity, where products are made to order and share the same manufacturing facility. The study is completed by an experimental analysis to investigate the effect of variations in the relevant parameters of the problem.

This paper discusses the problem of the layout flexibility problem. In an environment affected by stochastic product flows, identifying the optimal layout acquires particular relevance, as the layout itself must behave efficiently under varying conditions and levels of item production. This work advocates the need for modifying the parameters usually proposed in literature to optimize the physical location of the workstations on the shopfloor. These parameters will consider not only the average value of the part flows between two generic machines, but also the standard deviation of the flows themselves. With such quantities, it is possible to design layouts which guarantee a more regular performance, in terms of material handling requests when volumes and demand mix change over time (market dynamics). Therefore, this study concerns the formulation of stability layout indices which are based on the flow distributions between each machine pair (i.e. as a function of the route-sheets and the demand distribut...

A model to deal with the disassembly processes in remanufacturing systems is presented with focus being on evaluating their economic consequences. More specifically, the model assists decisions suc ...

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

A vendor managed system with the Consignment Stock agreement is a business practice where a buyer׳s inventory remains the property of the vendor until its withdrawal by the final customer demand. Such an agreement has shown to be a profitable stock management approach, especially when operating in uncertain environments where delivery lead times and/or market demand vary over time. One main issue that has been addressed in the literature on supply chain coordination is when a vendor׳s production process is imperfect; i.e., it generates defective items that are either reworked or scrapped. From the available works that investigated coordinating orders between a vendor and a buyer with imperfect production, to the authors׳ knowledge, no one has considered a Vendor Managed Inventory (VMI) with the Consignment Stock (CS) agreement as a policy where the vendor's production process is imperfect. This paper also introduces various managerial decisions pertaining to imperfect items, specifically, reworking items and applying minor-setups for restoration. A mathematical model is developed to determine the optimal production-inventory policies for various possible scenarios. The managerial decisions incorporated in this model give it the flexibility required to adapt to a firm's production situations and needs as may arise due to the nature of different industries and businesses. Significant findings include that accounting for imperfect items with Consignment Stock practice increases the batch size, reduces the number of batch shipments per cycle, and reduces the overall cycle time. Further, introducing minor setups for restoration reduces the overall cost of the system.

Nowadays, it is an essential commitment for firms to reduce energy consumption and therewith energy costs, which frequently account for a large part of the manufacturing costs. This work analyzes a system where a single product is manufactured on a machine and delivered to the subsequent production stage in batch shipments. The production rate at each stage may be varied within given limits. Energy consumption at each stage is strictly related to the production rate set according to a given function that depends on the specific characteristics of the production process. Energy consumption is assumed to occur both during production and during the idle state of the machines. The aim of this work is to propose an analytical model of this system and to minimize the total costs of producing and storing the product, including energy costs. The results of the paper indicate that energy-related costs can be reduced significantly if energy consumption is considered in planning the production process.

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

Along the food supply chains (FSC), energy plays a strategic role, being fundamental to guarantee quality and influential in the determination of economic values. Moreover, the same type of product may flow through chains differing in energy requirement, processing equipment and time spent in the chain itself. These differences between the FSCs (short vs. longer product lives and storage times, fast vs. slower transportation, low vs. higher energy contribution) motivated the study, which aims at capturing in an analytical model the relationships between the relevant parameters influencing the problem, thus addressing a possible approach to the chain optimisation. By the modelling approach proposed, jointly looking at economic aspects and energy efforts required to condition and preserve the product quality over time, it is possible to address new considerations for understanding FSCs peculiarities, so as to support decisions and improving the sustainability of the solution adopted.

The purpose of this paper is to provide a case-based framework to offer insights on the opportunity of recovering parts. We consider a two-stage spare parts supply chain, where independent repair shops are responsible for handling the repair process. There are two options to meet spare parts demand: repair shops may replace the part with a new one (ordered from the OEM) or they may use a part that they themselves repaired before. While repair shops achieve a larger profit by repairing parts, the OEM would prefer the use of new parts. However, he has no control over demand which might be obtained by offering buyback of broken parts. Furthermore, the OEM could recover these parts on a higher level, thus reducing production/procurement of new parts. The main contribution of this paper is the provision of a simple deterministic framework for answering the question whether a buyback option should be offered by the OEM to the repair shops, and which buyback price should be paid for each returned core. We further highlight the impact of remanufacturing performed at the OEM on the profitability of buyback.

In recent years, remanufacturing has emerged as an important research area, due to the tendency of stricter environmental regulations in industry and the awakening to the economic attraction of recovering the products rather than the disposal alternative. This also requires developing manufacturing planning and control techniques to improve the performance of remanufacturing systems. In order to reassemble finished products, new components are required since the recovery rate of return components can never reach 100%. When making a disassembly and procurement decision, we then need to balance the inventory holding cost and stockout cost. In the meantime, the process lead time depends on which disassembly and procurement option that is chosen. In this paper, we study a system where remanufacturing is driven by customer orders. A disassembly order is always released first and then the disassembly result determines whether a purchasing order is needed. Our objective is to examine the process lead time, which can be used to determine the planned lead time in production planning and control of remanufacturing. We start with disassembling a single-component case and then extend the model to a two-component scenario. We also investigate how the disassembly yield influences the system performance. Results of this study are intended to be implemented in a real-world engine remanufacturing environment.

The present paper presents the algorithmic solution, based on an Ant System metaheuristic, of an industrial production–inventory problem in a steel continuous-casting plant. The model proposed is based on an objective function, the aim of which is to find the most profitable production schedule of the steel billets. Furthermore, the model takes into account the relevant parameters of the finite-capacity productive system (e.g. set-up and processing times, demand profile, warehouse capacity). Moreover, the make-to-order production environment of the company presents a significant manufacturing phase, which is represented by the billet cooling warehouse (similarly to the drying process in paper and textile production, or maturing in food production): this fact introduces a relevant constraint to production schedule. The study shows the basic criteria used for the problem modelling and the steps proposed for profit optimisation. The Ant System algorithm implemented is discussed and its relevance for the steel plant production management is shown.

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

The study presents a comprehensive analysis of the efficiency over time of five steel plants pertaining to one of the largest private groups in Italy. In particular, the paper proposes a new technique for plant performance measurement that is able to help the management in formulating manufacturing strategies according to the performance measurements usually available in industrial environments. The analysis is carried out by the methodology of Data Envelopment Analysis (DEA), taking advantage of several improved solutions proposed in the literature adopted to augment the discriminating resolution. Results obtained are summed up by means of suitable cluster analysis. Finally, thanks to the dual formulation of DEA, a technical and economic analysis is proposed with reference to the productive units identified as inefficient. The technique proposed was successfully applied to the industrial case of reference and it can be easily extended to every manufacturing context.

at least one shipment for each buyer will occur within the cycle T. Within the same cycle T, all the shipments to the same buyer following the first one (if any) have to be done immediately, thus completely fulfilling each buyer by consecutive deliveries per each cycle; as far as the delivery sequence is concerned, the first buyer gets the first delivery, followed by its second delivery and so on. Once completed the deliveries planned within the cycle for the first buyer, the second one is served and so on, up to the last buyer Y. Within the same cycle T, multiple equal-sized consecutive deliveries to the same buyer may occur, but the sequence assigned must be observed, i.e. the buyers are served according to the order initially set. Therefore, under the assumptions made, it should be underlined that the sequencing of the deliveries to the buyers is relevant to the cost function and to the deliveries organisation.