Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2005. / Includes bibliographical references (leaves 80-83). / How can financial tools like real options and hedging mitigate and create value from uncertainty in transportation? This paper describes these concepts and identifies research on them that has relevance to transportation. It then gives historical background of the containerized ocean transportation industry, uses Porter's five forces to explain its dynamics, and explains how contracts are set up and managed. It identifies areas within containerized ocean transportation that could benefit from real options and hedging, claiming that recent deregulation is creating opportunities for innovative thought. It gives examples of how real options are already being used in the industry to create flexibility without having any price attached to them and then comes up with new ideas of using them. It concludes by, first, stating that both shippers and carriers can benefit from managing uncertainty together and, second, suggesting future areas of research. / by Sigurjón Pálsson. / M.Eng.in Logistics

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2004. / "June 2004." / Includes bibliographical references (leaves 51-53). / (cont.) are suggested to help future online grocers avoid the mistakes made by the earlier attempt, align their business strategy with the growing consumer interest in specialty foods and wellness services and find the niche market that is best for their business. Finally, a vision of future online grocery store is conceptualized based upon the latest Semantic web technologies and a successful supply chain management practice in the retail industry--Vendor Managed Inventory (VMI). / The e-commerce boom has led to a major shift in business paradigm from the traditional brick-and-mortar store to the direct sale click-and-mortar model across the business world. Amazon and Dell pioneered the direct sale concept and fundamentally changed the way of doing business in their industries. Since then, many traditional industries have experienced similar transformations. Online grocery business, for example, has seen many failed endeavors to emulate Amazon and Dell's success in the past few years. The most famous one was Webvan--a 7.8 billion dollar roller coaster ride that in two years burned through all its cash reserve and produced zero profits. Webvan epitomized one of the classic mistakes during the dotcom era--the "Get-big-fast" doctrine that infatuated the e-commerce world at that time. On the other hand, other online store such as Tesco and Peapod cautiously laid out their operations that strategically aligned with their original vision of the online grocery business--not as a revolutionary new business model but as a value-added convenience service provider that exists on top of the existing structure. That strategy not only helped them survive the turmoil of e-commerce downturn but also turned them into successful players in the markets they are serving. This thesis will analyze these three online grocers' business models and explore the underlying reasons that contributed to their failure and success, respectively. A recent trend in online grocery business is to positions online grocery store as a premium food and service provider that delivers high quality food products to the upper-income group. A representative case--FreshDirect--is analyzed to bring insights to this new niche market. From these findings, a list of recommendations / by Kang Xie. / M.Eng.in Logistics

Thesis (S.M.)--Massachusetts Institute of Technology, Engineering Systems Division, 2013. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 106-110). / Effective use of data is believed to be the key to address systemic inefficiencies in health innovation and delivery, and to significantly enhance value creation for patients and all stakeholders. However, there is no definition for health data. Rather, data in health is an assortment of observations and reports varying from science to clinical notes and reimbursement claims that emerge from practice rather than design. What is health data? In this thesis we try to answer that question by looking at the system of health almost exclusively as a system that generates, transforms, and interprets data. We overview the different meanings data has throughout the health system, we analyze systematically the inefficiencies and trends as they emerge from data, and propose a new architecture for the system of health in which data is not present by accident. The result of this thesis is a new architecture for the system of health that is consistent with its present state but also consistent with a future learning system and a redefinition of value in health care that is patient and information centric. / by Melissa Beth Rosen Ceruolo. / S.M.

Thesis (S.M. in Technology and Policy)--Massachusetts Institute of Technology, Engineering Systems Division, 2013. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 89-93). / Wind generation has been growing fast, with onshore wind having a 27% average annual growth rate over the past decade. Motivated by this growth, a comprehensive analysis of both the economic and engineering implications of a large wind penetration in power systems was conducted. In order to understand and capture the unique characteristics of wind generation different tools and methods were combined. First, an analysis of hourly wind and load profiles was completed for individual European countries and for the whole European region. Then, a detailed electricity model was used in order to capture the effects of a large wind penetration (up to 60% of total demand) on the power system. Finally, this information was integrated in a computable general equilibrium (CGE) model, the MIT EPPA model - a tool for analyzing the economy-wide implications of energy and climate policies. Based on the bottom-up modeling results, a new methodology for capturing wind intermittency in EPPA, through modeling system flexibility requirements at large wind penetration levels, was proposed. As a case study, a 40% and an 80% GHG emissions reduction scenarios by 2050 (relative to 1990 levels) were modeled for Europe. The analysis illustrates that, in order to mitigate wind intermittency, particularly for large wind penetration levels, a system needs to have enough flexible capacity installed - traditionally provided by gas or hydro technologies. However, it is shown that for a significant emissions reduction scenario (80% GHG reduction in Europe by 2050), providing this flexibility from the generation side might be challenging as low-cost, low-carbon, flexible, dispatchable technological options might be limited. This might impose a constraint on the total electricity use and on the growth of wind penetration. Thus, the importance of considering other options for providing flexibility in the system, such as storage, demand response or interconnections is displayed. In particular, the wind and load profile analysis indicates a high value of interconnecting wind farms in the European region. / by Ioanna Karkatsouli. / S.M.in Technology and Policy

Thesis: M. Eng. in Logistics, Massachusetts Institute of Technology, Engineering Systems Division, 2015. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 41-42). / Optimization models are a commonly used tool to identify cost efficient network flows. Complexity increases when various products move across different paths and transportation modes within one network. To address the challenges posed by this complexity, this thesis develops a mixed integer linear programming model for a uniform rental company. The company's product families are routed through intermediary distribution centers, while others bypass these points and move directly to a regional distribution center. Various simulations were run with the objective of minimizing fixed costs, warehousing, inventory and transportation expenses. The function was constrained by flow balance, demand and capacity constraints. The optimal solution proposed a network that used less facilities than currently operated within the company, and some in new locations due to transportation cost savings. As volume increased, the network structure continued to shift further from the company's current structure. Demand increased the influence of variable rates, while transportation lane rates were a significant factor in every version of the model run. / by Ann-Marie Chopyak and Haotian Lee. / M. Eng. in Logistics

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2008. / Includes bibliographical references (leaves 87-89). / There are a lot of growth opportunities for multinational companies in emerging markets. These markets have a large consumer base but the market conditions in these regions are novel to these multinational companies. Various strategies evaluating government regulations, sales, marketing and supply chain have to be analyzed, isolated and implemented so that companies can quickly adapt to new market conditions. The purpose of this thesis is to review successful supply chain strategies adopted by multinationals catering to a large number of consumers in India. Based on the review, the thesis recommends insights for developing supply chains in emerging markets. To accomplish this, various strategies and literature on supplier, manufacturer and distributor partnerships were evaluated, compared and contrasted. Interviews with key management personnel across the supplier-manufacturer horizon were also conducted to gain insider perspective and information pertaining to supply chain issues. Current literature and public documents available have shown that successful supply chain strategies involved unique partnerships between local competitors and entering multinationals and also partnerships between local governments and direct source. Examples that stand out are the partnerships between PepsiCo and farmers in the state of Punjab, India or those of Project Shakti between women entrepreneurs from rural India and Hindustan Lever. This thesis recommends that such partnerships may hold the key to entering new markets in order to merge together different professional cultures without the risk of losing substantial investments in infrastructure. In addition, it also recommends the advantages of vertical integration for emerging markets like India. In addition, the findings on fragmentation within the echelons of supply chains propose opportunities for understanding developmental barriers. / by Don J. Palathinkal. / M.Eng.in Logistics

Thesis (M.Eng.)--Massachusetts Institute of Technology, Engineering Systems Division, 2000. / Includes bibliographical references (leaves 44-46). / The e-commerce boom has had a ripple effect on the way bricks-and-mortar retail stores operate their business. Bricks-and-mortar stores not only have to compete with one another in the physical world; they now have to compete with the pure Internet players. However, there are several issues that bricks-and-mortar stores must face before they can launch their online operations. The transformation strategy must be carefully planned. In addition, bricks-and-mortar stores must face certain challenges those pure Internet players seldom or never encounter. First, they have to recognize that e-commerce users have become an important segment of consumers; if they decide to go online, they must take the endeavor seriously. Second, they need to determine the best way to integrate online and physical operations. On the other hand, pure Internet players have also realized the benefits of a physical presence. Many have discovered that having outlets can improve their customers' overall shopping experience. For instance, Gateway Computers started as a catalog ordering company, but now the company has stores all over the country which serve as showrooms where customers can try out the computers. This combination has significantly increased Gateway's sales. This thesis will explore the factors that lead to the need for "clicks-and-mortar". Furthermore, it will point out the challenges facing clicks-and-mortar companies and discuss them in detail. It will then elaborate on the transition process and then create three clicks-and-mortar models. Finally, it will make a detailed comparison of the three models in order to determine their benefits and limitations. / by Ben Endy. / M.Eng.

Thesis: Ph. D., Massachusetts Institute of Technology, Engineering Systems Division, 2014. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 199-205). / This thesis explores the potential risk implications that a large penetration of intermittent renewable electricity generation -such as wind and solar power- may have on the future electricity generation technology mix, focusing on the anticipated new operating conditions of different thermal generating technologies and their remuneration in a competitive market environment. In addition, this thesis illustrates with an example how risk should be valued at the power plant level in order to internalize the potential risks to which the generators are exposed. This thesis first compares the impacts of three different bidding rules on wholesale prices and on the remuneration of units in power systems with a significant share of renewable generation. The effects of bidding rules are distinguished from the effects of regulatory uncertainty that can unexpectedly increase renewable generation by considering two distinct situations: 1) an 'adapted' capacity mix, which is optimized for any given amount of renewable penetration, and 2) a 'non-adapted' capacity mix, which is optimized for zero renewable penetration, but that operates with a certain non-zero renewable capacity, added on top of an already adequate system. The analysis performed stresses the importance of sound mechanisms that allow the full-cost recovery of plants in a system where the intermittency of renewables accentuates nonconvex costs, without over-increasing the cost paid by consumers for electricity. Additionally, the analysis quantifies the potential losses incurred by different thermal technologies if renewable deployment occurs without allowing for adaptation. Methodologically, this thesis uses a novel long-term generation investment model, the Investment Model for Renewable Electricity Systems (IMRES), to determine the minimum cost thermal capacity mix necessary to complement renewable generation to meet electricity demand, and to extract hourly wholesale prices. IMRES is a capacity expansion model with unit commitment constraints whose main characteristics are: 1) reflecting the impact of hourly resolution operation constraints on investment decisions and on total generation cost; 2) accounting for the chronological variability of demand and renewable output, and the correlation between the two; and 3) deciding on power plant investments at the individual plant level. These characteristics allow for a detailed analysis of the profits obtained by individual plants in systems with large renewable penetration levels. In addition, this thesis tests the performance of a heuristic method that selects four weeks from a full year series to optimally represent the net load duration curve (i.e., the difference between demand and renewable output, decreasingly ordered). For each application of this heuristic method, three metrics are proposed to reflect that the approximation also represents the chronological variability of the net load. Lastly, this thesis explores the role of risk in the valuation of electricity generating technologies and shows how to incorporate standard risk pricing principles into the popular Monte Carlo simulation analysis. The exposition is structured using the standard framework for a typical Monte Carlo cash flow simulation so that the implementation can be readily generalized. This framework stresses the necessity of an asset pricing approach to assess the relationship between the risk in the assets cash flows and the macroeconomic risk with which the financial investors are concerned. The framework provided is flexible and can accommodate many different structures for the interaction between the macroeconomic risk and the risks in the asset's cash flows (such as those from shocks in renewable deployment). / by Fernando J. de Sisternes. / Ph. D.

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2007. / Includes bibliographical references (leaf 63). / A large consumer package goods company would like to know the answer to the following question. What is the value to its customers of increased delivery frequency or reduced lead time? To answer this question, we collected shipment and inventory data for three customers: a mass merchandiser, a grocery store chain, and a drug store chain in the US. We examined the shipment histories to the customers' Distribution Centers (DCs) in the West, the Midwest, and the East for SKUs from three product families. We developed a continuous review QR inventory model to calculate the theoretical inventories for these high volume SKUs. We used this model to assess the theoretical inventory requirements for multiple scenarios entailing some form of increased frequency or decreased lead time. Some companies run heavy promotions during which time the majority of sales occur. If such a company is to benefit from reduced lead time from its supplier to their DCs, shipments from their DCs to stores must be frequent enough to respond to their stores' needs during a promotion. / (cont.) If this is not the case, the main opportunity to reduce inventory will be through better promotional planning. The data showed that there was a great amount of variability in the average inventory levels at the customers' DCs, which suggested that some DCs have large excesses of inventory for some SKUs. If customers could simply match their best in class inventory levels across all other products and locations, possibly $120 million could be saved annually in inventory carrying costs across all of this company's customers. The model also suggested that increasing delivery frequency provides a greater value than decreasing lead time. The methodology used to calculate the value of potential savings to customers could be applied to other locations or other industries. / by Joseph Sean Walkenhorst. / M.Eng.in Logistics

Thesis (Ph. D.)--Massachusetts Institute of Technology, Engineering Systems Division, 2009. / Cataloged from PDF version of thesis. / Includes bibliographical references. / Efforts to understand the determination of needs of new weapon systems must take into account inputs and actions beyond the formally documented requirements generation process. This study analyzes three recent historical cases of fighter aircraft development to identify decisions made independently from the documented requirements process, about the need for new systems. The primary inputs to those decisions are identified, and a qualitative model for understanding the undocumented inputs, and their role in determining weapon system needs, is presented. By analyzing data across the cases, which span a period of significant change in fighter design, the concept of a Dominant Mission Emphasis (DME) is introduced. The DME is defined as that mission which receives the most emphasis from the majority of participants in the needs determination process, and which the majority of other missions support, either directly or indirectly. It emerges when enough participants become convinced that it is appropriate to address the military, economic, political, social, and other needs that exist, and it serves as a means for bounding the intractable array of possibilities for weapon system needs. The convincing of participants occurs primarily through a social process, not a technical or an authoritative one. Over time, as conditions change, the appropriateness of the DME will decrease. The appropriateness over time can be modeled with a bell-shaped curve. Cues are identified which suggest the need to re-examine the DME. / (cont.) The strength of a DME can be measured by qualitative and quantitative indicators, including such things as verbal statements, military doctrine, intellectual and academic writings, organization within the military, resources committed, and promotion decisions. These indicators can also be used as controls to strengthen or weaken a DME in response to the perception of its appropriateness for existing conditions. The DME is constantly being questioned and challenged by individuals who seek to convince others that its appropriateness is not sufficient for existing conditions. Alternative missions are proposed and advocated as new DMEs. The roles of the primary means for convincing participants of the appropriateness of a DME are presented. / by Daniel Mark Gillespie. / Ph.D.