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We consider three problems on inventory, transportation and location in a supply chain. In Chapter 2, we study Multilevel Rationing (MR) and Strict Priority (SP) stock allocation policies for a centralized single product multi-class M/G/1 make-to-stock queueing systems. To obtain the total cost of the system under these policies, we introduce a new method called “customer composition”. Using this method, we focus on the proportion of customers of each class out of the total number of customers in the queue since the number of customers in M/G/1 queues is invariant for any non-idling and non-anticipating policy. We consider a series of two-priority M/G/1 queues with an exceptional service time in each busy period to characterize the customer composition. We derive closed form expressions for the costs of SP and MR policies using these results. In Chapter 3, we consider a two-echelon inventory system with a congested centralized production facility and several Distribution Centers (DCs). We assume that the production and transportation times are stochastic that are generally distributed, and customers arrive to each DC according to an independent Poisson process. Inventory at DCs is managed using the one-for-one replenishment policy. We use the customer composition approach to characterize the total inventory carrying and backlog costs of the system under the FCFS, SP and MR allocation policies at the warehouse. For the special case of exponentially distributed production and transportation times, we use the unit-flow method and derive closed form expressions for the optimal cost and base-stock level of the DCs. We numerically demonstrate that prioritization using either the SP or the MR policy could be very beneficial in comparison with the FCFS policy. In Chapter 4, we study a two-echelon supply chain with a set of suppliers, a set of retailers and a set of capacitated cross-docks which are to be established. The demand of the retailers could be satisfied from the suppliers through the cross-docks. The objective is to determine the number and location of cross-docks, the assignment of retailers to suppliers so that the total cost of pipeline and retailers’ inventory, transportation, and facility location is minimized. We formulate the problem as a non-linear mixed integer programming and derive several structural results for special cases of the problem. To solve the general problem, we show that it can be written as a cutting stock problem and develop a column generation algorithm to solve it. We investigate the efficiency of the proposed algorithm numerically.

Integrated robust planning systems that cover all levels of SC hierarchy have become increasingly important. Strategic, tactical, and operational SC plans should not be generated in isolation to avoid infeasible and conflicting decisions. On the other hand, enterprise planning systems contain over millions of records that are processed in each planning iteration. In such enterprises, the ability to generate robust plans is vital to their success because such plans can save the enterprise resources that may otherwise have to be reserved for likely SC plan changes. A robust SC plan is valid in all circumstances and does not need many corrections in the case of interruption, error, or disturbance. Such a reliable plan is proactive as well as reactive. Proactivity can be achieved by forecasting the future events and taking them into account in planning. Reactivity is a matter of agility, the capability of keeping track of system behaviour and capturing alarming signals from its environment, and the ability to respond quickly to the occurrence of an unforeseen event. Modeling such a system behaviour and providing solutions after such an event is extremely important for a SC. This study focuses on integrated supply chain planning with stochastic dynamic considerations. An integrated tactical-operational model is developed and then segregated into two sub-models which are solved iteratively. A SC is a stochastic dynamic system whose state changes over time often in an unpredictable manner. As a result, the customer demand is treated as an uncertain parameter and is handled by exploiting scenario-based stochastic programming. The increase in the number of scenarios makes it difficult to obtain quick and good solutions. As such, a Branch and Fix algorithm is developed to segregate the stochastic model into isolated islands so as to make the computationally intractable problem solvable. However not all the practitioners, planners, and managers are risk neutral. Some of them may be concerned about the risky extreme scenarios. In view of this, the robust optimization approach is also adopted in this thesis. Both the solution robustness and model robustness are taken into account in the tactical model. Futhermore, the dynamic behaviour of a SC system is handled with the concept of Model Predictive Control (MPC).

I empirically examine the choice of a firm’s vertical boundaries—specifically, the decision to use supplier-customer contracts instead of either using markets or vertical integration. I examine the determinants of supplier-customer contracts using data on a customer’s contractual purchase obligations with its suppliers. Contracting propensity is positively related to supplier relationship-specific investments (RSI), the supplier’s relative bargaining power, and vertical integration costs, and negatively related to contracting costs, alternative sources of information about the customer, and the percentage of a customer’s input traded on financial markets. I also find that customer firms which have product market contracts with their suppliers have better relative performance. These performance effects are enhanced by relationship-specific investments and are robust to corrections for endogeneity. Additionally, I examine the choice between vertical integration versus supplier-customer contracts and find that the choice is predicted by the type of RSI. Consistent with theory, RSI measured using tangible (intangible) assets are positively related to integration (contracts). Further, positive (negative) shocks to industry-level intangible investment are related to increases in a firm’s contracting activity and decreases (increases) in the level of vertical integration, while positive (negative) shocks to industry-level tangible investment are related to decreases in contracting activity and increases (decreases) in the level of vertical integration. My results suggest that market frictions play an important role in shaping supplier-customer contracting activity and firm boundaries.

Bakgrund Johan Andersson som är inköpschef på PEAB menar att det finns förbättringsmöjligheter för beställningsprocessen av betong. Informationsflödet i hela försörjningskedjan, som består av PEAB, Swerock och BASF, är bristfällig som enligt parterna leder till kapacitet- och ledtidsproblem i försörjningskedjan. Syfte Syftet med den här uppsatsen är att undersöka hur beställningsprocessen av betong ser ut i försörjningskedjan, samt att lokalisera vilka delar i processen som har förbättringspotential med avseende på information-, kapacitet- och ledtidsproblem. Även att undersöka vilken materialplaneringsmetod som är mest lämplig i försörjningskedjan under de nuvarande förutsättningarna och om någon förutsättning måste ändras för att en implementering ska vara genomförbar. Likaså är syftet att undersöka vilken inverkan den eventuellt nya materialplaneringsmetoden får på försörjningskedjan. Slutsats Det återfinns förbättringspotential i försörjningskedjan med hänseende på informationsflödet. För att den valda täcktidsplaneringen ska kunna implementeras i försörjningskedjan måste några av de nuvarande miljöplaneringsfaktorerna ändras.

Saab Microwave Systems (SMW) is a business unit within Saab AB that manufactures and develops different types of radar- and sensor systems for naval, airborne and ground based forces as well as within the market for civil security. In addition to the manufacturing of radar and sensor systems they also provide different types of service concepts. The business unit has 50 years of experience within the area of developing radar systems and is considered to be one of the market leaders. When applying an assemble-to-order production strategy with products at this level of cost price the product lead-time is vital and becomes an important part of the strategy within marketing and sales.   Within SMW there is a new department called Supply Management (SM) that provides the supply of incoming and outgoing material. Within SM there are four sub-departments working with activities such as planning, purchasing, receiving inspection, storage and distribution. Today, the supply process is relatively inefficient and there are delays in the flow due to suddenly arising problems. These delays generate big problems since SMW applies a just-in-time purchasing strategy. Based upon this problem the major purpose of this thesis work is to perform an analysis of the material flow in order to identify problems and contribute to a more efficient supply process.   When the problems were identified the authors in consultation with the management choose to give priority to one problem in order to have a more finite focus regarding the analysis. The most serious problem that are given priority to is the receiving inspection since there is a lack of proper measurements, the planning is inadequate, the level of inspection is to high as well as uncontrolled, the inspections are based upon subjective appraisals and there is a lack of storage space. Within this problem there will be an extra focus upon the level of inspection even though the other problems will be given thought as well. When this problem was chosen as the main area of focus the authors took the level of importance and usefulness for the company into consideration, what came up during the analysis of the material flow as well as what the authors considered to be the best area of focus given existing conditions.   The suggested improvements presented by the authors mainly consist of two areas regarding the level of inspection. The first suggestion consists of a filtering model that through a set of parameters are able to decide whether a specific article should be going through a reduced level of inspection or not. The second suggestion consists of a model that the company could use when they are phasing in new suppliers or improving existing ones. The purpose of this model is to create a close collaboration between important suppliers and SMW in order to reach a higher level of quality on the incoming material. The reason to why this model is created is due to the fact that the company has a very high level of inspection regarding incoming material today since the quality in many cases is faulty. By using this model the authors' ambition is to reduce the risk of defectives reaching SMW by supplier collaboration and this way oppose defectives earlier in the material flow. In addition to these suggested improvements the authors also suggest some thoughts and ideas regarding what is needed to be taken into consideration in order to reach a better planning and how the work efficiency within the receiving inspection department can be improved. / Saab Microwave Systems (SMW) är en affärsenhet inom Saab AB och de tillverkar och utvecklar idag olika typer av radarsystem för luftfart, markbaserade enheter samt inom det marina. Företaget tillverkar och utvecklar även radarsystem inom marknaden för civil säkerhet. Vid sidan av tillverkningen av radar- och sensorsystem erbjuder företaget även intilliggande servicekoncept och eftermarknadsservice. Enheten har 50 års gedigen erfarenhet inom området radarutveckling och är ett ledande företag på marknaden. Med en kundorderstyrd produktion av produkter i denna höga prisklass blir ledtid en viktig del av marknadsföring och försäljningsargumentation vilket innebär att materialförsörjningen är vital för framgång.   Inom SMW finns idag en nybildad enhet, Supply Management (SM), som ombesörjer materialförsörjningen av gods till och från SMW. Inom denna enhet finns fyra undergrupperingar; planering, operativt inköp, ankomstkontroll och förråd samt godsmottagning och spedition. I dagsläget fungerar inte materialförsörjningen som önskat utan det uppstår ofta brister och förseningar i flödet, något som skapar stora problem då SMW i så hög utsträckning som möjligt försöker tillämpa inköpsstrategin just-in-time. Med hänsyn till detta är examensarbetets främsta uppgift att göra en flödesanalys i syfte att identifiera brister och effektivisera materialförsörjningen.   Efter att ha presenterat en bristidentifiering, baserad på en flödeskartläggning, har författarna i samråd med ledningsgruppen för enheten Supply Management valt att prioritera en brist för att ha ett konkret fokusområde för arbetet med analys och förbättringsförslag. Den allvarligaste bristen som prioriteras för vidare arbete är en ineffektiv ankomstkontroll där det saknas vettiga nyckeltal och verksamhetsmätning, där planering och resurssättning sker utifrån osäkra data, kontrollomfattningen är hög och okontrollerad, kontrollerna baseras på subjektiva bedömningar samtidigt som det råder utrymmesbrist i lager och förråd.  Inom denna brist läggs extra fokus på kontrollomfattningen även om övriga problemområden också tas i beaktning i ett vidare arbete. När fokusområde valdes togs hänsyn till vad som framkom i bristidentifieringen, vad som var viktigast och mest kritiskt för SMW samt vad författarna ansåg sig kunna prestera utifrån gällande förutsättningar.   Författarnas förbättringsförslag består främst av två huvudområden kopplade till kontrollomfattningen. För det första presenteras en filtreringsmodell som genom ett antal parametrar sorterar artiklar efter huruvida de bedöms kunna genomgå en lättare (billigare och mindre resurskrävande) kontroll eller inte. Det andra förslaget är en modell för hur företaget kan arbeta när de fasar in nya och/eller utvecklar utvalda leverantörer med hög inverkan i syfte att skapa ett nära samarbete där högre kvalitet kan uppnås. Syftet med framtagning av modellen samt dess utformning grundar sig i att kontrollomfattningen som utförs på SMW är kopplad till inkommande kvalitet. Utifrån detta perspektiv vill författarna genom denna modell reducera riskerna för dålig inkommande kvalitet tidigare i materialflödet genom ett organiserat samarbete. I tillägg till dessa förslag presenteras även idéer och tankar på vad som bör tas i beaktning för att kunna uppnå en bättre och mer sanningsenlig planering samt hur arbetseffektiviteten kan höjas genom att tillsätta en administrativ- och teknisk roll på ankomstkontrollen.

Supply chain management addresses the management of materials and information across the entire chain from suppliers to producers, distributors, retailers, and customers. In the past few decades, scholars gave ample attention about the impact of inventory on Supply Chain Management (SCM). Roughly speaking, research on supply chain management has been mainly focused on three major issues. One is the behavior of information flow; the second issue deals with inventory management; the third issue is orientated to planning and operations management. In this paper the second issue, namely inventory management will be discussed. The author will follow the phases of classifying inventory; identify cost factors; assess cost components; calculate EOQ; giving suggestion and effect of inventory on supply chain will be discussed. The result is going to become clear under the analysis of two alternatives by using MCDM (Multiple Criteria Decision Making) method. The conclusion is when optimizing the inventory management, both up stream and down stream activities will run effectively.

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