Thesis (M.B.A.)--Naval Postgraduate School, December 2003. / "MBA professional report"--Cover. Thesis advisor(s): Ira Lewis, Keebom Kang, Nicholas Dew. Includes bibliographical references (p. 73-75). Also available online.

Thesis (Ph. D.)--University of Washington, 2002. / Vita. Includes bibliographical references (leaves 71-75).

Over the past decade, outsourcing has emerged as an imperative for competitive success in modern organizations. Yet, the high failure rate of outsourcing initiatives suggests that despite the significant opportunities available through outsourcing, several organizations remain unprepared for the transformation that it brings. My dissertation, “Essays on the Organization and Value of Outsourcing Relationships,” identifies governance strategies that maximize the strategic value of outsourcing investments and estimates the size of governance effects by analyzing the contribution of efficient governance to an increase in shareholder value of the outsourcing firm. The first two essays, “An Empirical Analysis of the Impact of Information Capabilities Design on Business Process Outsourcing (BPO) Performance” and “An Empirical Analysis of the Contractual and Information Structures of Business Process Outsourcing (BPO) Relationships,” focus on business process outsourcing (BPO), the fastest growing segment of the outsourcing market. In particular, the first essay emphasizes the information intensive nature of BPO to posit that performance heterogeneity across BPO relationships is a function of the fit between the information requirements and information capabilities of the relationship. The design of information capabilities extends contract design that addresses incentive conflicts to include design of the information structure comprising relational processes and technologies that address cognitive conflict between the participant firms. The second essay demonstrates complementarities between the contractual and information structures to emphasize that their joint assessment is necessary to enhance the explanatory power of extant theories of organization. These results have important implications for how BPO relationships must be designed and managed to realize strategic value. The third essay in my dissertation, “Outsourcing Discount or Paradox? A Comparative Analysis of the Long-Term Abnormal Stock Returns and Operational Performance Gains across Outsourcing Contracts,” estimates the extent of this strategic value by assessing the longterm abnormal stock returns to the hundred largest outsourcing initiatives implemented between 1996 and 2005. I find that transaction cost economizing outsourcing decisions yield significantly higher abnormal returns. The results imply the need to exercise caution in initiating outsourcing initiatives and emphasize that value chain scoping and management are important sources of comparative advantage in the modern firm. / text

The logistics industry is an imperative component of trade and a major contributor to economic growth in many countries. However, the logistics activities come along with severe negative environmental impact, particularly in freight transport which is considered the most important source of environmental hazards in a logistics system. Even though 3PLs have a key role in the logistics industry, only a limited number of studies have been conducted to analyze the greenness of their activities. Therefore, this study is done with the aim to examine the greenness of 3PLs in Hong Kong and to understand the key barriers that they face during green logistics implementation. This empirical research is conducted through case studies with eight 3PLs. An analytical framework which consists of eight green transport measures and nine influencing factors is developed to facilitate the research. The findings suggest that green logistics is evolving in the 3PL industry Hong Kong but it is still at a preliminary stage. It also shows that the number of green transport measures adopted by 3PLs in Hong Kong is lower as compared to the analyzed 3PLs’ headquarters in other countries. The study further reveals that 3PLs in Hong Kong tend to adopt those measures which directly bring cost benefits to the companies, such as, eco-driving, load factor optimization, route optimization and fleet management. Nevertheless, measures which require financial investment or trade-off of profit margin/operational efficiency, for example, fleet modernization and modal shift are not commonly adopted. Moreover, some of the green measures, such as, green fuel or vehicle are not adopted by the case companies simply because they are unavailable in Hong Kong. A number of practical barriers are derived from the case analyses. They are considered the main causes of slowing down green logistics development in the 3PL industry in Hong Kong. While different stakeholders play a role in overcoming the hurdles of the green logistics development, the Government is found to be the most influencing one as it can influence external as well as some of the internal barriers elicited by this study. Therefore, it should take a leading role in eliminating the barriers. At the same time, in order to comprehensively facilitate the progress of green logistics development, efforts and commitments from other stakeholders, i.e. 3PLs, industry associations and customers are required. / published_or_final_version / Transport Policy and Planning / Master / Master of Arts in Transport Policy and Planning

Logistics makes extensive use of human and material resources to achieve a target level of customer service at the lowest possible cost. It has been recognized as a major key to success in commerce and industry, and continues to evolve radically and grow in importance in recent years. Warehousing, as one of the most costly elements of logistics, is often the central operation in most logistics networks. Its successful management is critical in terms of both cost and service. In this thesis, two problem areas in warehouse logistics are studied: stock loading and order picking. Stock loading is an essential operation in modern logistics. Improvement on container capacity utilization and loading efficiency significantly reduces costs. For a given set of boxes in different sizes and an unlimited number of identical containers, the basic cargo loading problem is to determine the minimum number of containers required. The problem is proven NP-hard. To tackle this problem, a Tabu search optimization with a tree-based cargo loading algorithm as its inner heuristic is proposed. This approach has flexibility in taking different box conditions into consideration, and can find better solutions on average than other recent meta- or heuristic algorithms. Decreasing order sizes and increasing fuel costs provide a strong incentive for the inner-city truck loading operation to utilize container space more efficiently in transporting goods to multiple clients during one trip. This considers not only traditional loading constraints, but also multi-drop requirements. A wallbuilding heuristics based on a binary tree data structure is proposed to handle these side constraints. A dynamic space decomposition approach, together with a repacking and space amalgamation strategy, permits an efficient and effective loading plan. Order picking, one of the most critical warehousing operations, is the second problem studied in this thesis. An analytical approximation model is proposed based on probability modeling and queueing network theory applied to a synchronized zone picker-to-part order picking system with different routing and ABC-class inventory storage policies. The numerical results are compared and validated via simulation. The resulting model can therefore be usefully applied in the design and selection process of order picking systems. The routing versus storage issues are further investigated with a simulation model. This extends the existing research by evaluating multiple routing and storage policies under varying operating conditions. Results show that the midpoint, return and traversal routing policies generally perform best when paired with perimeter, across-aisle and within-aisle storage strategies, respectively. Yet performance is indeed dependent on demand patterns, zone sizes, batch sizes and order sizes. At first glance, order picking and stock loading operation seem to pursue different objectives. However, they are two related operations conducted sequentially from internal to the outbound side of warehousing. An efficient order picking system is a precondition for an effective loading operation at the shipping dock, especially when multiple orders need to be selected for consolidation in shipment. The proposed loading algorithms and the order picking system performance evaluation models can be used to further study the effective integration of these two functions. / published_or_final_version / Mathematics / Doctoral / Doctor of Philosophy

Supplier selection and order allocation are significant decisions for a manufacturer to ensure stable material flows in a highly competitive supply chain, in particular when customers are willing to accept products with less desirable product attributes. Hence, this study develops efficient methodologies to solve optimally the integrated supplier selection and order allocation problem incorporating customer flexibility for a manufacturer producing multiple products over a multi-period planning horizon. In this research, a new fuzzy multi-attribute approach is proposed to evaluate customer flexibility which is characterized through range and response. The approach calculates the product’s general utility value. This value is used by a bi-variant function which is developed to determine the retail price for the product. A new mixed integer program model describing the behavior of the basic problem is firstly developed. This basic model is the first to jointly determine: 1) type and quantity of the product variants to be offered; 2) the suppliers to be selected and orders to be allocated; and 3) inventory levels of product variants and raw materials/components. The objective is to maximize the manufacturer’s total profit subject to various operating constraints. This basic problem constitutes a very complex combinatorial optimization problem that is Nondeterministic Polynomial (NP)-hard. To tackle this challenge, two new optimization algorithms, i.e., an improved genetic approach called king GA (KGA) and an innovative hybrid algorithm called (CP-SA) _I which combines the techniques of constraint programming and simulated annealing are developed to locate optimal solutions. Extensive computational experiments demonstrate the effectiveness of these algorithms and also show clearly that (CP-SA) _I outperforms KGA in terms of both solution quality and computational cost. To examine the influence of subcontracting as one widespread practice in modern production management, this study also develops a modified mathematical model. It shares some similarity with the basic model but brings additional complexity by taking into consideration subcontractors for inter-mediate components and machine capacity. Since (CP-SA) _I outperforms KGA, it is employed and modified to solve the modified problem. Hence, this study presents a new hybrid algorithm called (CP-SA) _II, to locate optimal solutions. This study also establishes a new parallel (CP-SA) _II algorithm to enhance the performance of (CP-SA) _II. This parallel algorithm is implemented on a distributed computing platform based on the contemporary Graphic Processing Unit (GPU) using the Compute Unified Device Architecture (CUDA) programming model. Extensive numerical experiments conducted clearly demonstrate that the parallel (CP-SA) _II algorithm and its serial counterpart are efficient and robust optimization tools for formulating integrated supplier selection and order allocation decisions. Sensitivity analysis is employed to study the effects of the critical parameters on the performance of these algorithms. Finally, the convergence behavior of the proposed parallel (CP-SA) _II algorithm is studied theoretically. The results prove that the search process eventually converges to the global optimum if the overall best solution is maintained over time. / published_or_final_version / Industrial and Manufacturing Systems Engineering / Doctoral / Doctor of Philosophy

Logistics plays a more and more important role in manufacturing company to sharp competitive in today’s supply chain integration. As the end of logistics in manufacturer, container loading intellectualization has attracted more and more focuses. Harmonious coordination between planning and execution ground high performance of the container loading. Several challenges exist in business operations. Firstly, container loading planning is time-consuming. Several case-based constraints exist in the optimization defined by different customers and the Customs. Secondly, execution driven by container loading is inefficient. Operators may use unclear or unreadable paper-based guidance during execution which is inconvenient to handle. Besides, due to various situations, shipping documentations are complex. Afterwards Order-picking, a critical part in executions, is a costly activity. Thirdly, coordination during whole container loading process is another challenge. Information sharing between planning and execution is delayed and inaccurate. The whole procedure usually cannot be monitored by managers in a remote office. Problems cannot be addressed without timely provision of data. This research targets to establish a smart container loading platform based on real life practices and constraints. Unlike common warehouse operation, warehouse executions are driven by container loading. To overcome the challenges, an integrated solution is proposed with three main parts. The first one is to establish RFID-enabled real-time smart environment where device-level data is collected timely with bidirectional communications under Wi-Fi occasionally connected situation. Secondly, Service-oriented Architecture (SOA) is applied in rule-based computation and heterogeneous information sources integration. In rule-based computation, constraint is computed and wrapped as rule. It is a kind of service which is restored in service repository according to its properties. Under different cases, several rules are addressed and invoked in a specified sequence to realize different business logics. And the platform should communicate with heterogeneous sources within short time. Systems wrap application programming interfaces (API) as web services which can be invoked flexibly at any time. Data fetch process is divided into several threads which extract data concurrently. Thirdly, container loading optimal model is provided based on practical constraints. Based on various rules, shipments are clustered as groups before loading. To load containers more equally, heuristic algorithm is provided with reducing container capacity continuously until other constraints are violated or more shipment groups are separated. Four contributions have been made in this study. Firstly, a five-layer system architecture is proposed for small and medium enterprises (SMEs) applications especially in occasionally connected network environment, rule-based computations, and efficient data exchanges. Secondly, several practical constraints of loading planning are addressed and a heuristic algorithm is designed. Shipments can be equally loaded while satisfying most conflicted constraints. Thirdly, a solution for auto-ID enabled warehouse execution is provided. The solution is driven by container loading equipped with real-time information capturing and processing. Fourthly, a guidance can be refereed for real life implementations in SME. The guidance summarizes system customization procedures with reengineered resources. / published_or_final_version / Industrial and Manufacturing Systems Engineering / Master / Master of Philosophy

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published_or_final_version / Industrial and Manufacturing Systems Engineering / Master / Master of Philosophy

This dissertation includes four independent essays. Essay one (chapter two) considers a two-echelon, two-supply chain (SC) system in which manufacturers supply a generic product to their exclusive retailers, who then use service level and retail price to compete for heterogeneous consumers. We question: how do varied consumer preferences get reflected not only in differentiated products/services, but through them to the choice of SC structure that delivers them? We find that SCs can strategically manipulate the product/service strategy and SC structure to hedge themselves from horizontal competition. The key finding is that in a market where consumers have stronger diminishing marginal utility on service, then less differentiated products/services will be observed, and only decentralized supply chains can be the market equilibrium. This is in contrast to the well-known result in marketing that choosing vertical integration is always a Nash equilibrium, and that choosing decentralization can only be a Nash equilibrium when product substitutability is high. Essay two (chapter three) explores the classical revenue management problem in a competitive context, with both price and seat inventory competition. The main question is how should management make strategic marketing (pricing) and operational (seat allocation) decisions in such a competitive market? Do the conventional approaches (models and algorithms based on a monopoly market) give us the appropriate strategies? We find that in a market where price competition dominates, managers should set a lower price and safety protection level for full fare customers than in a monopoly or alliance market. In a market where seat inventory competition dominates, managers should set a higher price and safety protection level than a monopoly or alliance would. Interestingly, in a market where the two levels of competition are more evenly matched, managers should set a lower price and a higher safety protection level than a monopoly. We also explore the effect of the degree of competition and the market structure on the strategic decisions, and whether there is a first adopter advantage or second adopter disadvantage with revenue management. Essay three aims to extend the understanding of the Newsvendor model to a competitive framework. In a market with both price and inventory competition, newsvendors can gain customers with price and secure the sales with availability. We find that the newsvendors should adjust their inventory (safety stock or total inventory) and pricing strategies responsively to the nature of the competitive market. The profits of the newsvendors and their suppliers are also different under different competitive contexts. Both the Nash equilibrium strategy and the players' profits are influenced by the demand correlation and variability, but in different ways under different competitive scenarios. These observations provide some theoretical basis for the strategic selection made by newsvendors operating in certain competitive markets. Essay four (chapter five) explores the issue of competitors cooperating. It is a commonplace observation that even the most competitive firms often find it in their best interests to cooperate. An example of cooperation in operations management is when two supply chains agree in advance to transship or 'pool' surplus product for use by another. The alternative is to let their customers switch unsatisfied demand to a competitor. Which is preferable, and how does such a preference depend on the many parameters, prices, the nature of competition, the degree of competition, wholesale prices etc? To get answers, we study a stylized model under three market environments: a market with an exogenous retail price, an endogenous retail price, and with price competition. The summary answer is that strong price competition between substitutable goods should lead to caution in signing transshipment contracts. But with little price competition and particularly where retailers are free to set the transshipment price, then transshipment is probably the way to go. We also address the issue of an optimal transshipment price in each scenario, and compare the Nash equilibrium strategies between competing and transshipping.