This thesis studies an inventory-location problem faced by a large manufacturer and supplier of small to medium sized aircraft and their spare parts. The sale of after market spare parts is a major source of revenue for the company, but it is a complex industry with many unique challenges. The original problem is a multi-echelon network design problem, which is decomposed into a facility location problem with consolidated shipping challenges, and a spare parts inventory problem. The facility location problem is solved a number of times under different scenarios to give the company's leadership team access to a wide range of feasible solutions. The model itself is an important contribution to industry, allowing the company to solve a spare parts network problem that will guide strategic decision-making for years. The chapter serves as case-study on how to accurately model a large and complicated service parts supply chain through the use of mathematical programming, part aggregation and scenarios. The company used the scenario results to redesign its spare parts distribution network, opening new hubs and consolidating existing service centres. The costs savings associated with this project are estimated to be $4.4 Million USD annually. The proposed solution does increase the burden of customer freight charges on the company's customers compared to the current network, but the operational savings are expected to more than outweigh the increase in customer shipments costs. The project team thus recommended that the company consider subsidizing customer freight costs to offset the expected cost increase the customers face, resulting in lower costs for both the company and their customers. This solution could set a new standard for aircraft spare parts suppliers to follow. Considered next is an integrated inventory-location problem with service requirements based on the first problem. Customer demand is Poisson distributed and the service levels are time-based, leading to highly non-linear, stochastic service constraints and a nonlinear, mixed-integer optimization problem. Unlike previous works in the literature that propose approximations for the nonlinear constraints, this thesis presents an exact solution methodology using logic-based Benders decomposition. The problem is decomposed to separate the location decisions in the master problem from the inventory decisions in the subproblem. A new family of valid cuts is proposed and the algorithm is shown to converge to optimality. This is the first attempt to solve this type of problem exactly. Then, this thesis presents a new restrict-and-decompose scheme to further decompose the Benders master problem by part. The approach is tested on industry instances as well as random instances. The second algorithm is able to solve industry instances with up to 60 parts within two hours of computation time, while the maximum number of parts attempted in the literature is currently five. Finally, this thesis studies a second integrated inventory-location problem under different assumptions. While the previous model uses the backorder assumption for unfilled demand and a strict time window, the third model uses the lost-sales assumption and a soft time window for satisfying time sensitive customer demand. The restrict-and-decompose scheme is applied with little modification, the main difference being the calculation of the Benders cut coefficients. The algorithm is again guaranteed to converge to optimality. The results are compared against previous work under the same assumptions. The results deliver better solutions and certificates of optimality to a large set of test problems.

Abstract Management is a field that started getting attention in the beginning of the 20 th century by Frederick Taylor. His publication is called the Principles of Scientific Management and is based on the principles of using scientific methods to find the best way of conducting each operation within a production facility. Many of Taylor’s principles may appear obsolete today but the matter of an effective material flow is still highly current. Efficiency is the relationship between the input into an operation and its result. A substantial part of the material flow is storage and the costs tied to it. An area about the importance of eliminating storage is JIT or just in time. The main principle of JIT is that a product shouldn’t be produced until a customer expresses its demand for it. Inventory Management is an area within JIT and contains different principles regarding how to avoid storage. Production Management is another area with a set of principles on how to plan an efficient layout of the production. There are many benefits that can be achieved with an efficient production flow and also many disadvantages if the flow is inefficient. It is therefore important to identify the weak spots in the production line and improving them. Our research question: How can the principles of JIT within the areas Inventory Management and Production Management be used to make the material flow more efficient? By conducting a case study at a company in the plastic recycling business, we have come to a conclusion. They need to reduce the amount of material in the warehouse by either buying less material or by increasing the capacity of the cutting operation. The can also make the cutting operation automatic in order to decrease to amount of time that is required for the cutting. They can also eliminate the need for storing half complete material by purchasing a more efficient granulation machine. The last thing to improve is to move the warehouse for final storage closer to the loading area in order to decrease the amount of time needed for that particular operation.

We live in the age of the informed consumer creating a business climate of increasing competition, which implies that all companies need to be as efficient as possible at every level, and this includes inventory management. For many businesses, inventory is the largest asset on the balance sheet at any given time and therefore needs to be efficiently managed. A large amount of a company's costs can be attributed to the amount it invests in inventory and associated holding, transportation, and management costs; management of inventory is thus critical to an SME's profitability. Therefore, it is important to investigate the models for effective inventory management in SMEs. Inventory management entails more than simply the forecasting and replenishment of inventory; it also demands the management of inventory to optimise services and profit. The main objective of the study was to investigate the standard inventory theories and models used to help management in small to medium-sized enterprises in keeping costs down while still meeting customer service requirements. Organisational effectiveness was defined in terms of the effectiveness of the internal processes of an organisation. While accountants and senior managers tend to measure results of most, if not all, organisational activities in monetary terms, so it is no surprise that many organisations rely on financial measures such as ROI or ROA to measure effectiveness. However, effectiveness was defined as the ability to achieve stated inventory levels, judged in terms of financial measures like inventory turnover for this study. This study posits that the effectiveness of a given SME may be ascertained from the effectiveness of the inventory management decisions made by its management. Modern inventory management systems are based on well-recognised inventory models and even though the methods were developed many years ago they still perform well from a theoretical point of view. Inventory models like economic order quantity (EOQ), activity-based costing (ABC), analysis for inventory and just-in-time (JIT) that form the bases of modern inventory systems are still commonly used in the industry today. Modern inventory management systems like MRP/MRPII and ERP systems offer a complete inventory management system to SMEs, but despite the rapid development of ERP systems, little research can be found in evaluating the extent to which ERP could create a competitive advantage for SMEs. Safety inventory protects against inventory uncertainty by ensuring there are enough products available to maintain desired service levels. Based on this, safety inventory can be expressed as the quantity of inventory that has to be reserved in order to protect the system from random variables such as inventory-outs, which may occur as a result of either forecast errors or deviations from normal demand during average lead times. Supply chain management (SCM) is a set of approaches utilized to effectively incorporate suppliers, manufacturers, logistics, and consumers to place the right amount of inventory at the right places at the right time. Since inventories represent a significant investment by many businesses, the challenge, however, is to determine the lowest amount of inventory required to accomplish all of the service-level targets. Inventory costs are relevant to most liquidity, asset management and liability management ratios and only once a balance is found between service levels, costs of holding inventory and cost of manufacture, which, once achieved, will it lead to increased profitability. Inventory is a measure of both liquidity and in -service efficiency just like receivable turnover. These methods produce an overall level of inventory that senior management typically judges in terms of an inventory turnover ratio (annual sales / average inventory) or a total asset level. A literature study was conducted with the aid of a computer-based search, using the keywords identified, databases and search engines such as Google Search, Google Scholar, Business Source Premier, Emerald and EBSCO Host. The empirical research describes a process whereby data or facts on a specific issue were gathered and analysed. Both qualitative and quantitative research methods were employed to gather information from the defined population for this study. This study used a structured questionnaire as well as an open-ended and semi-structured interview with some of the population sample to collect empirical data. The sample tested consisted of 60 managers, owners or responsible persons for inventory management in small to medium enterprises in Gauteng, South Africa. The results of the questionnaires were submitted for statistical analyses at the Statistical Department of the North-West University. The results of the statistical analysis were interpreted by closer investigation of the correlations, cross tabulations and frequency analysis done with the aid of SSPS. After the statistical analysis the conclusion could be drawn that more than half of all questioned SMEs in the study were not effective in their inventory management and this is most probably the result of most respondents' lack of theoretical knowledge about inventory management theories. Furthermore, it was concluded that most small and medium businesses have experienced inventory shortages as a result of JIT ordering, but still chose not to hold safety inventories because of the cost associated with holding inventories. This also made them and their customers reliant on their suppliers' supply chain management for efficient service delivery. Furthermore, it was also found that ERP systems like SAP were too expensive to implement in small and very small businesses. Therefore, many small and medium businesses adopt the Pastel solution at a fraction of the price of the standard ERP systems to manage their inventories. / Thesis (M.B.A.)--North-West University, Vaal Triangle Campus, 2009.

We live in the age of the informed consumer creating a business climate of increasing competition, which implies that all companies need to be as efficient as possible at every level, and this includes inventory management. For many businesses, inventory is the largest asset on the balance sheet at any given time and therefore needs to be efficiently managed. A large amount of a company's costs can be attributed to the amount it invests in inventory and associated holding, transportation, and management costs; management of inventory is thus critical to an SME's profitability. Therefore, it is important to investigate the models for effective inventory management in SMEs. Inventory management entails more than simply the forecasting and replenishment of inventory; it also demands the management of inventory to optimise services and profit. The main objective of the study was to investigate the standard inventory theories and models used to help management in small to medium-sized enterprises in keeping costs down while still meeting customer service requirements. Organisational effectiveness was defined in terms of the effectiveness of the internal processes of an organisation. While accountants and senior managers tend to measure results of most, if not all, organisational activities in monetary terms, so it is no surprise that many organisations rely on financial measures such as ROI or ROA to measure effectiveness. However, effectiveness was defined as the ability to achieve stated inventory levels, judged in terms of financial measures like inventory turnover for this study. This study posits that the effectiveness of a given SME may be ascertained from the effectiveness of the inventory management decisions made by its management. Modern inventory management systems are based on well-recognised inventory models and even though the methods were developed many years ago they still perform well from a theoretical point of view. Inventory models like economic order quantity (EOQ), activity-based costing (ABC), analysis for inventory and just-in-time (JIT) that form the bases of modern inventory systems are still commonly used in the industry today. Modern inventory management systems like MRP/MRPII and ERP systems offer a complete inventory management system to SMEs, but despite the rapid development of ERP systems, little research can be found in evaluating the extent to which ERP could create a competitive advantage for SMEs. Safety inventory protects against inventory uncertainty by ensuring there are enough products available to maintain desired service levels. Based on this, safety inventory can be expressed as the quantity of inventory that has to be reserved in order to protect the system from random variables such as inventory-outs, which may occur as a result of either forecast errors or deviations from normal demand during average lead times. Supply chain management (SCM) is a set of approaches utilized to effectively incorporate suppliers, manufacturers, logistics, and consumers to place the right amount of inventory at the right places at the right time. Since inventories represent a significant investment by many businesses, the challenge, however, is to determine the lowest amount of inventory required to accomplish all of the service-level targets. Inventory costs are relevant to most liquidity, asset management and liability management ratios and only once a balance is found between service levels, costs of holding inventory and cost of manufacture, which, once achieved, will it lead to increased profitability. Inventory is a measure of both liquidity and in -service efficiency just like receivable turnover. These methods produce an overall level of inventory that senior management typically judges in terms of an inventory turnover ratio (annual sales / average inventory) or a total asset level. A literature study was conducted with the aid of a computer-based search, using the keywords identified, databases and search engines such as Google Search, Google Scholar, Business Source Premier, Emerald and EBSCO Host. The empirical research describes a process whereby data or facts on a specific issue were gathered and analysed. Both qualitative and quantitative research methods were employed to gather information from the defined population for this study. This study used a structured questionnaire as well as an open-ended and semi-structured interview with some of the population sample to collect empirical data. The sample tested consisted of 60 managers, owners or responsible persons for inventory management in small to medium enterprises in Gauteng, South Africa. The results of the questionnaires were submitted for statistical analyses at the Statistical Department of the North-West University. The results of the statistical analysis were interpreted by closer investigation of the correlations, cross tabulations and frequency analysis done with the aid of SSPS. After the statistical analysis the conclusion could be drawn that more than half of all questioned SMEs in the study were not effective in their inventory management and this is most probably the result of most respondents' lack of theoretical knowledge about inventory management theories. Furthermore, it was concluded that most small and medium businesses have experienced inventory shortages as a result of JIT ordering, but still chose not to hold safety inventories because of the cost associated with holding inventories. This also made them and their customers reliant on their suppliers' supply chain management for efficient service delivery. Furthermore, it was also found that ERP systems like SAP were too expensive to implement in small and very small businesses. Therefore, many small and medium businesses adopt the Pastel solution at a fraction of the price of the standard ERP systems to manage their inventories. / Thesis (M.B.A.)--North-West University, Vaal Triangle Campus, 2009.

The role of trust in traditional face-to-face mentoring has already been investigated in several research studies. However, to our knowledge, very few studies have examined how trust is established in electronic-mentoring relationships. The purpose of the current study is to examine by means of the Mayer et al. (1995) model how e-mentees perceive a prospective e-mentor's trustworthiness and how these perceptions influence the decision to be mentored by a particular e-mentor. A sample comprised of 253 undergraduate and graduate students from the Telfer School of Management at the University of Ottawa participated as potential mentees by completing a survey after having reviewed the selected e-mentor’s profile. The survey employed quantitative and qualitative measurements to assess the mentee's perception of the prospective e-mentor’s level of trustworthiness. In the quantitative section, both the Behavioural Trust Inventory (Gillespie, 2003) and the Factors of Perceived Trustworthiness (Mayer et al., 1999) were measured. The Behavioural Trust Inventory was designed to measure the extent to which a mentee is willing to be vulnerable in e-mentoring relationships. The Factors of Perceived Trustworthiness (ability, benevolence and integrity) were designed to measure these three attributes’ contributions to the extent to which the mentees perceived the e-mentor as being trustworthy. The factorial structure (confirmatory factor analysis) and internal consistency (Cronbach’s alpha) of the constructs were examined. Structural equation modeling was conducted to test the fit of the models (Behavioural Trust Inventory and Mayer et al.) to an e-mentoring context. In the qualitative section, the indicators of trustworthiness were collected by means of an open-ended question and were analyzed by means of content analysis. The results of the quantitative analysis revealed that the models (the Behavioural Trust Inventory and the Factors of Perceived Trustworthiness) have an adequate fit with the e-mentoring model after accounting for some correlated error terms. The results of the qualitative analysis identified some other attributes (apart from ability, benevolence and integrity groups) have an influence on the extent to which the mentees perceived the e-mentor as being trustworthy. The main finding is that the Mayer et al. (1995) model appears to be a suitable device for the measurement of trust in e-mentoring relationships at the initiation phase.

We study three problems on supply chain location and inventory under uncertainty. In Chapter 2, we study the inventory purchasing and allocation problem in a movie rental chain under demand uncertainty. We formulate this problem as a newsvendor-like problem with multiple rental opportunities. We study several demand and return forecasting models based on comparable films using iterative maximum likelihood estimation and Bayesian estimation via Markov chain Monte Carlo simulation. Test results on data from a large movie rental firm reveal systematic under-buying of movies purchased through revenue sharing contracts and over-buying of movies purchased through standard ones. For the movies considered, the model estimates an increase in the average profit per title for new movies by 15.5% and 2.5% for revenue sharing and standard titles, respectively. We discuss the implications of revenue sharing on the profitability of both the rental firm and the studio. In Chapter 3, we focus on the effect of travel time uncertainty on the location of facilities that provide service within a given coverage radius on the transportation network. Three models - expected covering, robust covering and expected p-robust covering - are studied; each appropriate for different types of facilities. Exact and approximate algorithms are developed. The models are used to analyze the location of fire stations in the city of Toronto. Using real traffic data we show that the current system design is quite far from optimality and provide recommendations for improving the performance. In Chapter 4, we continue our analysis in Chapter 3 to study the trade-off between adding new facilities versus relocating some existing facilities. We consider a multi-objective problem that aims at minimizing the number of facility relocations while maximizing expected and worst case network coverage. Exact and approximate algorithms are developed to solve three variations of the problem and find expected--worst case trade-off curves for any given number of relocations. The models are used to analyze the addition of four new fire stations to the city of Toronto. Our results suggest that the benefit of adding four new stations is achievable, at a lower cost, by relocating 4-5 stations.

This dissertation comprises three essays in which we develop optimization, econometric, and simulation models to help traditional retailers improve in-store operations. Our modeling efforts aim to tackle inventory record inaccuracy (IRI) and suboptimal staffing levels, both of which are pervasive problems in retailing and cause non-trivial profit loss. In the first essay, we devise two optimization models that represent current practices in industry to minimize costs induced by IRI: daily-fraction and all-or-none inspection. We further perform a case study to identify deficiencies of store operating practices given different risk preferences. Our findings provide practical guidelines for managers to design cost-efficient inspection policy. In the second essay, we develop a dynamic simulation model to analyze multiple antecedents of IRI. Based on simulation results, we derive two hypotheses on the association between IRI and labor. The panel data analysis shows that both the level and the mix of store labor have strong impacts on IRI. Our analysis derives qualitative insights for retail managers to prevent the occurrence of IRI. Finally, in the third essay, we perform an empirical study to improve staffing decisions in retailing. We first develop a response function to quantify the impact of labor and traffic on sales. Grounded on the function we propose a traffic-based staffing heuristic, which performs closely to the optimal and outperforms existing staffing levels in counterfactual experiments. A major contribution of our study is to quantify the benefits of delivering labor plans based on traffic information. Also, the staffing approach is easy to use and saves the need for traffic forecasting.

Recycling and remanufacturing returned goods are economically beneficial for companies since the cost of obtaining used parts is lower in many cases and selling price is close to that of a new product. This leads to decreased costs and thereby increased profits for the company. In addition, there are also great environmental benefits by keeping the structural integrity of a part; the energy used for disassembly and refurbishing is much lower than the energy required for raw material extraction and machining. Encompassing the returned goods makes the supply chain to closed loop supply chain, which is different from the traditional supply chain due to reverse logistics. A reverse flow of material is however usually more complex than a forward flow of parts and components from suppliers. This means that inventory management becomes critical and needs to be viewed from a new perspective. The purpose of the report is to study FAW Co., Ltd’s inventory situation in reverse logistics. The report analysed the inventory management in the company, specifically focusing on one product as the instance Motor Engine LFTS-2000since it is in the maturity stage of product life cycle. Two scenarios were designed to consider how different parameters affect inventory levels in reverse logistics. The report analysed how different parameters affect the inventory levels and minimum cost. With the increasing returned goods are processed, inventory levels and minimum cost will decrease correspondingly.

Transportation is important in making supply chain decisions. With the careful consideration of transportation expenses, the performance of each supply chain member, as well as the entire supply chain, could be improved significantly. The purpose of this research is: 1) to explore and identify the various situations that relate to replenishment and transportation activities; and 2) to reveal the strength of the connection between purchase quantity and transportation discounts, and integrate the two discounts to enhance supply-chain coordination. The problem is analyzed and categorized into four representative cases, depending on transportation. To aid the supplier or the carrier to determine the discount that should be offered, in light of the buyer's reaction to that discount, decision models are proposed under three different circumstances. First, assuming a single product, we investigate the quantity discounts from the supplier's perspective, via a noncooperative game-theoretical approach and also a joint decision model. Taking into account the price elasticity of demand, this analysis aids a sole supplier in establishing an all-unit quantity discount policy in light of the buyer's best reaction. The Stackelberg equilibrium and the Pareto-optimal solution set are derived for the noncooperative and joint-decision cases, respectively. Our research indicates that channel efficiency can be improved significantly if the quantity discount decision is made jointly rather than noncooperatively. Moreover, we extend our model in several directions: (a) the product is transported by a private fleet; (b) the buyer may choose to offer her customers a different percentage discount than that she obtained from the supplier; and (c) the case of multiple (heterogeneous) buyers. Numerical examples are employed, here and throughout the thesis, to illustrate the practical applications of the models presented and the sensitivity to model parameters. Secondly, we consider a situation with a family of SKUs for which the supplier will offer a quantity discount, according to the aggregate purchases of the product group. Management of those items is based on the modified periodic policy. From the supplier's point of view, what are the optimal parameters (breakpoint and discount percentage)? For deterministic demand, we discuss the cases in which demand is both constant and price-sensitive. First as a noncooperative Stackelberg game, and then when the two parties make the discount and replenishment decisions jointly, we illustrate the impact of price-sensitivity and joint decision making on the supplier's discount policy. The third approach studies the case in which transportation of the goods by a common carrier (a public, for-hire trucking company) is integrated in the quantity discount decisions. In reality, it is quite difficult for the carrier to determine the proper transportation discount, especially in the case of LTL (less-than-truckload) trucking. This is not only because of the "phantom freight" phenomenon, caused by possible over-declaration of the weight by the shipper, but also due to the fact that the discount relates to both transportation and inventory issues. In this research, we study the problem of coordinating the transportation and quantity discount decisions from the perspectives of the parties who offer the discounts, rather than the ones that take them. By comparison of the noncooperative and cooperative models, we show that cooperation provides better overall results, not only to each party, but also to the entire supply chain. To divide the extra payoffs gained from that cooperation, we further conduct a coalition analysis, based upon the concept of "Shapley Value." A detailed algorithm and numerical examples are provided to illustrate the solution procedure. Finally, the thesis concludes with comprehensive remarks. We summarize the contributions of this thesis, show the overall results obtained here, and present the directions that our research may take in the future.

Typescript. / Thesis (Ph. D.)--University of Hawaii at Manoa, 1986. / Bibliography: leaves 209-223. / Photocopy. / xvi, 223 leaves, bound 29 cm